FAQs on Requirements for Supervising Mortgage Brokers and Agents

  1. How do I notify FSCO of a Mortgage Broker or Agent who is not suitable for licensing? 

  2. Does FSCO require a standard cost of borrowing disclosure form, or is my Mortgage Brokerage responsible for developing its own form?

  3. What types of identification are acceptable for verifying a client’s/borrower’s identity? 

  4. Can I ask a potential client to sign an agreement outlining the costs and fees for arranging a mortgage, before he/she enters into a mortgage?

  5. What does "effective supervision" mean?

  6. Can I ask FSCO to review my Mortgage Brokerage’s policies and procedures manual?

  7. If a Mortgage Agent provides his/her own money to fund a mortgage transaction through the Mortgage Brokerage, is it the Principal Broker’s responsibility to ensure compliance?

  8. Who should be contacted if there is a breach of information by a Mortgage Broker or Agent?

  9. Can I use FSCO’s webinar recordings and presentation slides as an education tool for my Mortgage Brokerage’s staff?

  10. Are the Mortgage Brokerages, Lenders and Administrators Act, 2006 and regulations available in print format?

  11. How can I educate myself on an ongoing basis?

  12. If I have a question about a different area of my Mortgage Brokerage’s business conduct and its relevance to the law, who can I contact?

1. How do I notify FSCO of a Mortgage Broker or Agent who is not suitable for licensing?   

Each Mortgage Brokerage is required to immediately notify FSCO if there are reasonable grounds to believe that a Mortgage Broker or Agent is not suitable to be licensed.  Mortgage Brokerages can notify FSCO in writing by mail or fax, and should include any supporting documentation.  They can also use the Mortgage Business Activity Complaint Form, which can be downloaded on FSCO’s website.


 

Attn: Market Risk Assessment Unit
Financial Services Commission of Ontario
5160 Yonge Street, Box 85
Toronto, ON  M2N 6L9
Fax: 416-590-8480

2. Does FSCO require a standard cost of borrowing disclosure form, or is my Mortgage Brokerage responsible for developing its own form?

FSCO does not require the use of a standard form for disclosing the cost of borrowing.  Each Mortgage Brokerage is required to provide borrowers with a disclosure statement that contains the required information on the cost of borrowing.  A Mortgage Brokerage can develop its own form, or it may choose to use one of the Cost of Borrowing Disclosure Forms developed by the Mortgage Brokerage industry associations and vendors.

 

On July 1, 2015, FSCO modified the Investor/Lender Disclosure Statement for Brokered Transactions and Renewal Form. The updated forms are available on FSCO’s website.

q3 3. What types of identification are acceptable for verifying a client’s/borrower’s identity? 

Each Mortgage Brokerage has a duty to take reasonable steps to verify the identities of its clients/borrowers and other parties in mortgage transactions.  If a Mortgage Brokerage is not able to identify the identity of another party, it must advise the client/borrower. 

 

The Mortgage Brokerage’s Principal Broker is responsible for developing policies and procedures on verifying clients’/borrowers’ identities, and in ensuring that the Mortgage Brokerage is able to show that it took reasonable steps to verify clients’/borrowers’ identities.  To determine what types of identification are acceptable for verifying a client’s/borrower’s identity, consult with your Principal Broker.

4. Can I ask a potential client to sign an agreement outlining the costs and fees for arranging a mortgage, before he/she enters into a mortgage?

A Mortgage Brokerage may ask a potential borrower/client to sign an agreement which discloses the Brokerage’s fees, and commits the borrower/client to working exclusively with the Brokerage for a specific period of time.  However, the potential borrower/client can choose whether he/she wishes to sign the agreement, or shop around.

5. What does "effective supervision" mean?

The Principal Broker is responsible for the conduct of the Mortgage Brokerage and its Brokers and Agents.  “Effective supervision” means that the Principal Broker can show that he/she has taken reasonable steps to ensure every requirement under the Mortgage Brokerages, Lenders and Administrators Act, 2006 [New Window] and regulations are met, and that contraventions are handled appropriately.

6. Can I ask FSCO to review my Mortgage Brokerage’s policies and procedures manual?

FSCO does not review or approve public relations materials or policies and procedures manuals for individuals or Mortgage Brokerages.  It is the responsibility of the Principal Broker to ensure that the Mortgage Brokerage’s policies and procedures manual is adequately designed, and to make recommendations for changes or amendments.

7. If a Mortgage Agent provides his/her own money to fund a mortgage transaction through the Mortgage Brokerage, is it the Principal Broker’s responsibility to ensure compliance?

The Mortgage Brokerage and Principal Broker are responsible for ensuring the mortgage transaction is compliant with the Mortgage Brokerages, Lenders and Administrators Act, 2006 [New Window] and regulations.

8. Who should be contacted if there is a breach of information by a Mortgage Broker or Agent?

The Principal Broker is responsible for the conduct of the Mortgage Brokerage and its Brokers and Agents.  If there is a breach of information by a Mortgage Broker or Agent, send a letter to FSCO describing the situation, along with any supporting documentation.

 

Attn: Market Risk Assessment Unit 
Financial Services Commission of Ontario
5160 Yonge Street, Box 85
Toronto, ON  M2N 6L9
Fax: 416-590-8480

 

9. Can I use FSCO’s webinar recordings and presentation slides as an education tool for my Mortgage Brokerage’s staff?

 

Yes, you can use FSCO’s webinar recordings and presentation slides as an educational tool to train your Mortgage Brokerage’s Brokers and Agents.  You may also wish to develop additional education tools to train staff.

10. Are the Mortgage Brokerages, Lenders and Administrators Act, 2006and regulations available in print format?

You can print out the Mortgage Brokerages, Lenders and Administrators Act, 2006[New Window] and regulations, which are available at www.e-laws.gov.on.ca [New Window].

11. How can I educate myself on an ongoing basis?

To educate yourself on an ongoing basis, visit FSCO’s website to access online resources, such as Compliance Checklists, frequently asked questions, webinar recordings and the Mortgage Broker e-Info Newsletter. You can also take advantage of educational resources and events offered by mortgage brokering industry associations, such as Mortgage Professionals Canada [New Window] (MPC) and the Canadian Mortgage Brokers Association (Ontario) [New Window].

12. If I have a question about a different area of my Mortgage Brokerage’s business conduct and its relevance to the law, who can I contact?

Principal Brokers who have questions about their Mortgage Brokerage’s business conduct and its relevance to the law should seek legal advice.

 
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