Chapter 5 - Regulation and Legislation (True and False)

Question 1

As of January 2009, a brokerage must disclose to a borrower if one of its Agents will receive a fee from a lender in connection with the mortgage renewal.

Answer 1

True

Question 2

Borrowers are entitled to the following information, only if they ask: brokerage name and license number

Answer 2

False – this information must be provided in all circumstances.

Question 3

It is a good idea for a brokerage to have a complaints process but this is not required by law

Answer 3

False – the MBLAA requires that every brokerage have a complaints process.

Question 4

The Superintendent of FSCO has the authority to refuse to grant a license to a brokerage if the Superintendent thinks the name might confuse the public with another existing brokerage

Answer 4

True

Question 5

A sole proprietorship must establish its eligibility for licensure as a mortgage brokerage whereas a corporation does not

Answer 5

False – every entity applying for a brokerage license must establish its eligibility

Question 6

Under certain circumstances, the Superintendent of FSCO may suspend a broker’s license without warning

Answer 6

True

Question 7

No changes may be made to the Regulations without going through the formal process of receiving Royal Assent

Answer 7

False – The Regulations may be amended without going through that process which is required for Bills.

Question 8

The Financial Services Commission is only concerned with one sector, the mortgage brokerage industry

Answer 8

False – it regulates several other financial services industries, including the insurance industry.

Question 9

Standards of Practice are guiding principles that businesses are encouraged to implement

Answer 9

False – these are principles that a brokerage is required to implement. Failure to meet the standards of practice is deemed a contravention of the MBLAA and subjects the brokerage to fines or other penalties.

Question 10

Regulatory decisions by the Superintendent of FSCO are final, based on the powers conferred upon the position

Answer 10

False – Decisions may be appealed to the Tribunal and to civil court.

Question 11

As per the MBLAA, there are currently three different licenses in the mortgage brokerage industry

Answer 11

False – there are currently four: brokerage, broker, agent and administrator.

Question 12

The Superintendent of FSCO (or his/her designate) may visit a brokerage within the FSCO registry to examine documents and records.

Answer 12

True

Question 13

The principal broker designation was created by the MBLAA to address compliance issues within the brokerage

Answer 13

True. - Principal Broker = CCO (Chief Compliance Officer)

Question 14

The role of the brokerage may be defined as “taking steps, on behalf of another person or entity, to enforce payment by a borrower under a mortgage.”

Answer 14

False – this is the definition of a mortgage administrator

Question 15

A Mortgage Broker may work only for one brokerage whereas a Mortgage Agent may be employed by several brokerages at the same time

Answer 15

False – Both a Broker and an Agent can only work for one brokerage at a time