FAQs on FSCO's New Forms for Providing Disclosure Information to Investors and Lenders

​Questions About All Five New Forms

 

  1. Why does FSCO have five new forms for providing disclosure information to investors and lenders who are interested in development and/or construction loans, including syndicated mortgages?
  2. I currently use the Investor/Lender Disclosure Statement for Brokered Transactions.  Which of the three new forms (Forms 1, 1.1 and 1.2) should I use on July 1, 2015?
  3. I currently use the Renewal Form. Which of the two new forms (Forms 2 and 2.1) should I use on July 1, 2015?
  4. When do I need to start using the five new forms?
  5. Do third party service providers have access to the five new forms?
  6. Is my investment in a mortgage guaranteed by any government agency?
  7. Are the new forms available on FSCO's website?

 

Questions about Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions

 

  1. Why did FSCO update the Investor/Lender Disclosure Statement for Brokered Transactions?
  2. Who needs to use Form 1- Investor/Lender Disclosure Statement for Brokered Transactions? 
  3. Why is the updated Investor/Lender Disclosure Statement for Brokered Transactions (Form 1) longer than the current version of the form?
  4. Who did FSCO consult when it decided to update the Investor/Lender Disclosure Statement for Brokered Transactions?
  5. What should I do if I don’t understand some of the terms/words in the completed Investor/Lender Disclosure Statement for Brokered Transactions?
  6. Are certain investors/lenders not required to receive a completed Form 1- Investor/Lender Disclosure Statement for Brokered Transactions? 

 

Questions about Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans

 
  1. Who needs to use Form 1.1 - Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans?
  2. Is Form 1.1 - Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans replacing a previous form?
  3. Does Form 1.1 - Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans need to be completed in conjunction with any other form?  

 

Questions about Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period

 
  1. Who needs to use Form 1.2 - Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period?
  2. Does Form 1.2 - Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period need to be completed in addition to any other forms?
  3. My mortgage broker is asking me to reduce the two business days that I have to review the Investor/Lender Disclosure Statement for Brokered Transactions to one business day. Do I need to agree to this provision?
  4. What is the definition for a "business day"?

 

Questions about Form 2 – Renewal Form

 

  1. Why did FSCO update the Renewal Form?
  2. Who needs to use Form 2 - Renewal Form?
  3. When do I need to start using Form 2 - Renewal Form?
  4. Are certain investors/lenders not required to receive a completed Form 2- Renewal Form?

 

Questions about Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period

 
  1. Is Form 2.1 - Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period a new form?
  2. Who needs to use Form 2.1 - Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period?  
  3. Does Form 2.1 - Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period need to be completed in addition to any other forms?
  4. My mortgage broker is asking me to reduce the two business days that I have to review Form 2 to one business day. Do I need to agree to this provision?
  5. What is the definition for a "business day"?
 

Questions About All Five New Forms

 
Why does FSCO have five new forms for providing disclosure information to investors and lenders who are interested in development and/or construction loans, including syndicated mortgages?
FSCO has seen a number of changes and expansions in the market for private and syndicated mortgages, and has determined it is important to provide additional disclosure information to potential lenders and investors. FSCO also wanted to make the forms more user-friendly and incorporate feedback that it has received from members of the mortgage broking industry.
 
I currently use the Investor/Lender Disclosure Statement for Brokered Transactions.  Which of the three new forms (Forms 1, 1.1 and 1.2) should I use on July 1, 2015?
On July 1, 2015, the current Investor/Lender Disclosure Statement for Brokered Transactions will be replaced by the following three new forms:
 
Form 1 must be completed by a licensed mortgage broker, and be provided to prospective lenders or investors who are considering an investment in a mortgage. If a construction or development loan is involved, a mortgage broker must complete both Forms 1 and 1.1, and provide them to the potential lender/investor. Form 1.2 is optional and only needs to be completed by a mortgage broker on behalf of a mortgage brokerage, if the investor is waiving his/her right to the minimum two business day disclosure time, so that it can be reduced to one business day.
 
I currently use the Renewal Form. Which of the two new forms (Forms 2 and 2.1) should I use on July 1, 2015?
On July 1, 2015, the current Renewal Form will be replaced by the following two new forms:
 
Form 2 must be completed by a licensed mortgage broker, and be provided to lenders or investors who are planning to renew an investment in a mortgage. Form 2.1 is optional and only needs to be completed by a mortgage broker, if the investor is waiving his/her right to the minimum two business day disclosure time, so that it can be reduced to one business day.
 
When do I need to start using the five new forms?
On July 1, 2015, the current Investor/Lender Disclosure Statement for Brokered Transactions will be replaced by the following three new forms:
 
FSCO is also planning to replace the current Renewal Form with the following two new forms on July 1, 2015:
 
Do third party service providers have access to the five new forms?
Yes, FSCO has contacted several third party service providers and will make Forms 1, 1.1, 1.2, 2 and 2.1 available to them in advance of their effective date.
 
Is my investment in a mortgage guaranteed by any government agency?
No, investments in mortgages are not insured by any government agency or other investor protection fund. Potential investors/lenders should always seek independent legal advice.
 
Are the new forms available on FSCO's website?
Yes, all of the new forms are available on FSCO’s website as fillable PDF documents. They have also been provided to third party companies that supply the mortgage broking industry.
 

 
 

Questions about Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions

 
Why did FSCO update the Investor/Lender Disclosure Statement for Brokered Transactions?
The Investor/Lender Disclosure Statement for Brokered Transactions was updated to provide additional disclosure information to investors and lenders. The new form will help increase transparency, enhance consumer protection and allow investors/lenders to make more informed investment decisions.
 
Who needs to use Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions?
Starting on July 1, 2015, Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions must be completed by a licensed mortgage broker, and be provided to prospective lenders or investors who are considering an investment in a mortgage. 
 
Why is the updated Investor/Lender Disclosure Statement for Brokered Transactions (Form 1) longer than the current version of the form?
FSCO's goal is to ensure that potential investors or lenders have the information they need to make informed decisions, before they commit any funds to an investment. For construction and/or development loans, including syndicated mortgages, a mortgage broker must complete both Forms 1 and 1.1, and provide them to the potential lender/investor.
 
Who did FSCO consult when it decided to update the Investor/Lender Disclosure Statement for Brokered Transactions?
Prior to updating the current Investor/Lender Disclosure Statement for Brokered Transactions, FSCO consulted with industry associations and members of FSCO’s Mortgage Broker Industry Working Group.
 
What should I do if I don’t understand some of the terms/words in the completed Investor/Lender Disclosure Statement for Brokered Transactions?
If you don’t understand some of the terms/words in the completed form, you may contact your mortgage brokerage, and/or seek independent legal advice to better understand the investment you are considering.
 
Are certain investors/lenders not required to receive a completed Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions?
Yes, under section 31 (2) of Ontario Regulation 188/08 Mortgage Brokerages: Standard of Practice [New Window], a completed Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions does not need to be provided to a lender/investor that is a member of a designated class of lenders and investors. The definition for this designated class of lenders and investors is provided in section 2 (1) of Ontario Regulation 188/08.   
 

 
 

Questions about Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans

 
Who needs to use Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans?
Starting on July 1, 2015, Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans must be completed if the mortgage is for a construction or development loan.  Form 1.1 must be completed by a licensed mortgage broker and be provided to the potential lender/investor, in addition to Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions.
 
Is Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans replacing a previous form?
No, Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans is a new form. This form was introduced because of market conditions. FSCO has determined it is important to provide additional disclosure information to inform potential lenders and investors.
 
Does Form 1.1 – Investor/Lender Disclosure Statement for Brokered Transactions: Addendum for Construction and Development Loans need to be completed in addition to any other form?  
 

 
 

Questions about Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period

 
Who needs to use Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period?
Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period is optional and only needs to be completed if a potential lender or investor wants to reduce his/her mandatory minimum two business day waiting period to one business day. This form goes into effect on July 1, 2015 and must be completed by a licensed mortgage broker, on behalf of a mortgage brokerage. 
 
Does Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting period need to be completed in addition to any other forms?
 
My mortgage broker is asking me to reduce the minimum two business days that I have to review the Investor/Lender Disclosure Statement for Brokered Transactions to one business day. Do I need to agree to this provision?
No, you are not required to waive your right to the minimum two business day waiting period. It is entirely your choice. However, you may agree to reduce this period to one business day, if you sign Form 1.2 – Investor/Lender Disclosure Statement for Brokered Transactions: Waiver for Reducing the Waiting Period.
 
What is the definition for a "business day"?
According to Ontario Regulation 188/08 [New Window] under the Mortgage Brokerages, Lenders and Administrators Act, 2006, a “business day” is defined as a day that is not a Saturday or a holiday. (Note that Sundays are defined as holidays.) That means business days are Monday to Friday, with the exception of any statutory holidays.
 

 
 
 

Questions about Form 2 – Renewal Form

 
Why did FSCO update the Renewal Form?
The Renewal Form was updated in order to:
 
Who needs to use Form 2 – Renewal Form?
Form 2 – Renewal Form must be completed by a licensed mortgage broker, and be provided to lenders or investors who are planning to renew an investment in a mortgage.
 
When do I need to start using Form 2 – Renewal Form?
On July 1, 2015, the current Renewal Form will be replaced by the following two new forms:
 
Are certain investors/lenders not required to receive a completed Form 2 – Renewal Form?
If the mortgage is renewing with the same lender, the existing lender must receive the completed Form 2 – Renewal Form (Ontario Regulation 188/08, section 32 (1)).
 
If a new investor is replacing the existing lender, then Form 1 – Investor/Lender Disclosure Statement for Brokered Transactions must be completed, and not Form 2.
 

 

 

 

Questions about Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period

 
Is Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period a new form?
Yes, Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period is new. The lender must be fully aware if they are agreeing to reduce the waiting period to one business day, when they are considering whether to continue participating in the mortgage.
 
Who needs to use Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period? 
Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period is optional and only needs to be completed if a potential lender or investor wants to reduce his/her mandatory minimum two business day waiting period to one business day. This form goes into effect on July 1, 2015 and must be completed by a licensed mortgage broker, on behalf of a mortgage brokerage. 
 
Does Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period need to be completed in addition to any other forms?  
 
My mortgage broker is asking me to reduce the two business days that I have to review Form 2 to one business day. Do I need to agree to this provision?
No, you are not required to waive your right to the minimum two business day waiting period. It is entirely your choice. However, you may agree to reduce this period to one business day, if you sign Form 2.1 – Investor/Lender Disclosure Statement for Brokered Mortgages on Renewal: Waiver for Reducing the Waiting Period.
 
What is the definition for a "business day"?
According to Ontario Regulation 188/08 [New Window] under the Mortgage Brokerages, Lenders and Administrators Act, 2006, a “business day” is defined as a day that is not a Saturday or a holiday. (Note that Sundays are defined as holidays.) That means business days are Monday to Friday, with the exception of any statutory holidays.
 
 

 
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