Module 2: Regulatory Framework Flashcards
Which provinces do not have regulation in place thus not requiring mortgage brokers to be licensed?
Nunavat, Yukon, Northwest Territories and PEI.
Who is the regulatory body in Nova Scotia (for mortgage brokerage)?
Mortgage Regulations Act (MRA), came into force in November 2021
What council was established in 2011 that’s intent was to harmonize mortgage brokerage regulation across Canada?
The Mortgage Broker Regulators Council of Canada was established because there is no single legislative body that oversees mortgage brokerage activity nationally.
Who administers the Mortgage Regulations Act (MRA) in Nova Scotia?
Minister of Service Nova Scotia and Internal Services (SNS-IS)
What are the penalties for contravening the MRA?
-Individuals are liable for fines not more than $500,000 and or imprisonment of not more than year or both penalties.
-A corporation is liable to fines up to $1,000,000.
How does section 2(1)(m) of the MRA define/describe who a mortgage broker is:
-Functions for a fee as an intermediary between a borrower and a lender for securing a mortgage.
-By advertisement that the individual is a broker.
-Undertakes any other prescribed activity.
What are the 3 license types that authorize mortgage brokering activity?
-Associate mortgage brokerage licence
-Mortgage broker licence
-Mortgage brokerage licence
Requirements a mortgage brokerage license application should meet?
-Be a Canadian resident (sole propretietors), incorporated (corporations) or formed uner the laws of any jurisidction in Canada (partnerships).
-Provide criminal background check
-Designate an appointed agent resident in NS who is able to accept service of notice and documents
-Provide proof of errors and omissions insurance
-Designate a principal broker
-Disclose a place in Canada where records will be retained
-Pay the prescribed licensing fee
Once you are licensed as a mortgage broker or associate mortgage brokerage, you must ensure continued compliance with the MRA and regulations, including (but not limited to):
-Advertising requirements
-Providing suitable mortgage options
-Disclosures to borrowers, lenders or investors
-Reporting changes in circumstances within tend days (where applicable)
-Keeping appropriate records
-Completing continuing educations requirements
-Licence renewal obligations
According to section 2(1) of the MRA, administering mortgages includes:
-Receiving paymetns made by the borrower and remitting those payments to the investors
-monitoring the performance of a borrwer with the respect to the borrowers obligation under the mortgage
-Indicating through advertisement that a person is a mortgage administrator
-Undertaking any other prescribed activities by regulations
How does the MRA define a mortgage lender?
A mortgage lender is a person who as a business or in the course of business extends credit secured by real property, or otherwise holds themselves out a a mortgage lender.
Must mortgage lenders be liscenced?
Mortgage lenders must be liscenced, however, financial institutions that provide mortgage funds, such as banks, trust and laon corporations, insurance companies and (to some extent) credit unions are exempt under the MRA (explained further in the Licence Exemptions section later in this module) and operate under a set of legal constraints and regulations.
What are some reasons/justifications that a mortgage brokerage may be suspended?
-Automatically suspended if the brokerage ceases to have at least one mortgage broker authorized to broker mortgages on its behalf.
-A broker or associated brokers licence is automatically suspended if they cease to be authorized to at on behalf of the mortgage brokerage named on his/her licence.
-A licence may be restrained, subject to a reinstatement fee of 50% of the licence type’s annual licensing fee as set out in the Mortgage Regulation Act General Regulations.
What are the ‘Cost of Borrowing Disclosure Regulations”?
New regulations intended to protect consumers by ensuring all borrowing costs are clearly and accurately outlined for them. The regulations describe how the cost of borrowing is calculated, manner and timing of disclosure a lender must provide to a borrower in a written disclosure statement.
