Regulating the Mortgage Brokering Industry in Ontario

FSCO oversees the mortgage brokering industry in Ontario. What does that mean to you?

 

The Mortgage Brokerages, Lenders and Administrators Act, 2006 requires all individuals and businesses in Ontario who carry out mortgage brokering activities to be licensed/registered with the Financial Services Commission of Ontario (FSCO) – the government agency responsible for overseeing the mortgage brokering industry in Ontario.

 

Any corporation or business carrying on the business of dealing or trading in mortgages, or lending money on the security of real estate in Ontario, and any individual acting as a mortgage broker or agent must be licensed with FSCO, unless an exemption applies, e.g., banks and other financial institutions do not need be licensed under the Act. The Act also requires mortgage administrators (those collecting mortgage payments for investors) to be licensed.

 

As of September 30, 2016, FSCO regulated 1,188 licensed mortgage brokerages, 2,681 licensed mortgage brokers, 10,893 licensed mortgage agents and 166 licensed mortgage administrators in Ontario. FSCO conducts inspections and investigates complaints regarding the activities of these licensees.

 

What Does This Mean to You?

Purchasing a house or condominium is likely the biggest financial investment you’ll make in your lifetime. By dealing with a licensed individual to arrange a mortgage for your property purchase, you’ll be confident that the mortgage broker or agent has met specific education, experience and suitability requirements.

 

You'll also be sure that the mortgage brokerage will:

 

  • Have a “principal broker” who acts as chief compliance officer.
  • Adequately supervise individuals who work for the mortgage brokerage.
  • Be held accountable for ensuring that its mortgage brokers and agents follow the law.
  • Disclose the nature of its relationship with borrowers and lenders.
  • Have errors and omissions insurance with coverage for fraudulent acts.
  • Inform you of all your requirements for the mortgage.  

 

How do you Check if an Individual or Business is Licensed?

If you want to use the services of a mortgage brokerage, broker or agent to arrange a mortgage for your property purchase, make sure the individual or business is licensed with FSCO. It’s easy to check – just visit FSCO’s Mortgage Brokerages, Administrators, Mortgage Agents, and Mortgage Brokers Licensed in Ontario page.

 

What Should you do if Your Potential Brokerage or Broker is not Licensed?

If your search results do not show the name of the mortgage brokerage, broker or agent, the individual or business is probably not licensed with FSCO. You may wish to ask them if they are under a different license or if they work for a financial institution. You can report an unlicensed individual or business by contacting FSCO at (416) 250-7250 or 1-800-668-0128.

 

FSCO will check its records to verify if the individual or business is licensed. Unlicensed individuals or businesses will be investigated. FSCO will actively pursue enforcement action when there is evidence of non-compliance with the law.

 

Watch this one-minute video on how the mortgage broker law protects you.

 

 

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