FAQs on Exemptions from Licensing Requirements Under the Mortgage Brokerages, Lenders and Administrators Act, 2006

  1. Who is exempt from becoming licensed under the Mortgage Brokerages, Lenders and Administrators Act?
  2. Do Real Estate Brokers who deal in mortgages need to be licensed?
  3. Do lawyers who deal in mortgages need to be licensed?
  4. Why are lawyers exempt from licensing under the Act if they act in a professional capacity?
  5. If I provide advice on mortgages as a Financial Planner or other professional, does the government consider this "dealing or trading in mortgages"?
  6. Under the Mortgage Brokerages, Lenders and Administrators Act, are there exemptions for providing referrals?
  7. Are collection agencies exempt from requiring a Mortgage Administrator’s licence?
  8. I am a Real Estate Broker. Am I exempt from the Mortgage Broker education requirements under the Act?

1. Who is exempt from becoming licensed under the Mortgage Brokerages, Lenders and Administrators Act?

Under the Mortgage Brokerages, Lenders and Administrators Act, 2006 ( Act), the following professionals/businesses are exempt from the requirements to be licensed as Mortgage Brokerages, Mortgage Brokers or Mortgage Agents:


  • Individuals or businesses that provide referrals that give limited information about a borrower to a potential lender, and vice versa. (Please refer to sections 1 and 2 of regulation 407/07for full details).
  • Lawyers who act in a professional legal capacity, on behalf of clients.  In these circumstances, a lawyer can: request another person to lend money to a client, administer or deal in mortgages, and solicit or trade in mortgages for a client.  However, lawyers cannot hold out, promote or advertise that they are dealing or trading in mortgages.
  • Financial institutions such as banks or credit unions and caisse populaires to which the Credit Unions and Caisses Populaires Act, 1994 applies.  This exemption also includes insurers that are licensed under the Insurance Act, corporations registered under the Loan and Trust Corporations Act and federal retail associations (as defined under the Co-operative Credit Associations Act).
  • Directors, officers and employees of financial institutions are exempt from requiring a licence as long as they are acting on behalf of their employer.   
  • Trustees in bankruptcy.
  • Any individual or business acting under a court order.
  • Certain statutory corporations.
  • Directors, officers and employees of crown agencies.
  • Directors, officers and employees of exempted businesses.


Additional Exemptions:


Exemptions for dealing in mortgages


  • consumer reporting agencies

Exemptions for trading in mortgages


  • dealers registered under the Securities Act
  • in connection with mortgage securitization
  • acting through a intermediary

Exemptions for mortgage lending


  • acting through an intermediary

Exemptions for administering mortgages


  • acting for the Crown
  • acting for a financial institution or finance company
  • a registered collection agency
  • in connection with mortgage-backed securities

Please note:


  • If you’re a Real Estate Broker who conducts mortgage broker activities, you must be licensed as a Mortgage Brokerage, Mortgage Broker or Mortgage Agent, unless an exemption applies.
  • If you are a Mortgage Agent who works for commission and are self-employed, you are not considered an employee of a financial institution.  Therefore, you are not exempt from the licensing requirement.
  • If you are a Financial Planner or other professional, and are providing your clients more than the limited information that is allowed by regulation 407/07, you need to be licensed unless an exemption applies.

For more detailed information on exemptions from the requirements to be licensed under the Mortgage Brokerages, Lenders and Administrators Act, 2006, please refer to Ontario Regulation 407/07 (Exemptions from the requirements to be licensed).


2. Do Real Estate Brokers who deal in mortgages need to be licensed?

Under the Mortgage Brokerages, Lenders and Administrators Act, 2006, Real Estate Brokers need to be licensed as Mortgage Brokers if they conduct mortgage broker activities.  However, the Act does not require a Real Estate Broker to be licensed if he/she is just providing referrals that give limited information about a borrower to a potential lender (and vice versa).  


For more detailed information on exemptions from the requirements to be licensed under the Mortgage Brokerages, Lenders and Administrators Act, 2006, please refer to Ontario Regulation 407/07 (Exemptions from the requirements to be licensed).


3. Do lawyers who deal in mortgages need to be licensed?

Under the Mortgage Brokerages, Lenders and Administrators Act, 2006, lawyers are exempt from the licensing requirement if they are conducting mortgage broker activities in a professional capacity, on behalf of clients.  In these circumstances, a lawyer can: request another person to lend money to a client, administer or deal in mortgages, and solicit or trade in mortgages for a client.  However, lawyers cannot hold out, promote or advertise that they are dealing or trading in mortgages.  Lawyers who intend to run a Mortgage Brokerage or advertise that they can arrange mortgages must be licensed.


4. Why are lawyers exempt from licensing under the Act if they act in a professional capacity?

The intent of the Mortgage Brokerages, Lenders and Administrators Act, 2006, is to provide a consistent level of protection for consumers, regardless of who they deal with, when obtaining a mortgage.  Lawyers typically assist with real estate and mortgage related transactions as part of their legal practices.  For these types of activities, the Act does not require lawyers to be licensed, since they are already regulated by the Law Society of Upper Canada.  However, if a lawyer promotes himself/herself as a Mortgage Broker, then the Act will require that he/she be licensed as a Mortgage Broker.


5. If I provide advice on mortgages as a Financial Planner or other professional, does the government consider this "dealing or trading in mortgages"?

If you are a Financial Planner or other professional, and are simply providing your clients advice on mortgages, you are not considered to be "dealing or trading in mortgages".  


However, you will need to be licensed if you are:


  • providing your clients referrals that provide more than the limited information that is allowed by Ontario Regulation 407/07 (exemptions from the requirements to be licensed) ,
  • assessing your clients on behalf of a potential lender, or
  • otherwise dealing or trading in mortgages.


6. Under the Mortgage Brokerages, Lenders and Administrators Act, are there exemptions for providing referrals?

The Mortgage Brokerages, Lenders and Administrators Act, 2006 exempts individuals from requiring a licence if they are only providing referrals that give limited information. This exemption allows an individual to provide limited information about a borrower to a potential mortgage lender, or provide limited information about a potential mortgage lender to a borrower for a fee.  For more details on this topic please refer to Ontario Regulation 407/07 (Exemptions from the Requirements to be Licensed).


7. Are collection agencies exempt from requiring a Mortgage Administrator’s licence?

Collection agencies are exempt from requiring a Mortgage Administrator’s licence if they are registered under the Collection Agencies Act, and do not receive and send mortgage payments to investors. 


8. I am a Real Estate Broker. Am I exempt from the Mortgage Broker education requirements under the Act?

As a transition measure, Real Estate Brokers are exempt from the education requirements under the Mortgage Brokerages, Lenders and Administrators Act, 2006, until July 1, 2009. However, to qualify for this exemption you must be registered as a Real Estate Broker with RECO the earlier of the date you apply for a licence or July 1, 2008.

 
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