The new Mortgage Brokerages, Lenders and Administrators Act (the new Act) received Royal Assent but has not yet come into effect. The new Act sets out the framework for regulating the mortgage brokerage industry. However, the details and specific rules are to be developed and set out in regulations.

In November 2006, the government released for consultation a number of draft regulations including proposed details of the new licensing requirements. These regulations would authorize the Superintendent to approve education requirements for mortgage agents and brokers for the purposes of issuing a license under the new Act. They also propose a transition period in which individuals (agents and brokers) currently authorized to deal in mortgages on behalf of a mortgage broker registered under the existing Mortgage Brokers Act (Registrant), would be exempt, if certain conditions are met, from satisfying the new education requirements to be licensed under the new Act.

Some of the proposed transition rules are explained below.

Mortgage agents

• Mortgage agents listed with FSCO as authorized to deal in mortgages on behalf of a Registrant for at least 2 years (within the three years immediately preceding their application for a licence) would be exempt from satisfying new education requirements for agents if they apply for a mortgage agent’s licence before the new Act comes into force.

• Mortgage agents listed with FSCO as authorized to deal in mortgages on behalf of a Registrant for less than two years would be exempt from satisfying the new education requirements to be licensed as a mortgage agent under the new regime if they have successfully completed one of the existing mortgage agent courses accepted by the Superintendent for transition purposes.

• Mortgage agent listed with FSCO as authorized to deal in mortgages on behalf of a Registrant for less than two years who have not completed one of the existing mortgage agent courses accepted by the Superintendent for transition purposes would be exempt from satisfying the new education requirements to be licensed as a mortgage agent under the new regime if they undertake, as a condition of their licence, to successfully complete, within two years after the new Act comes into effect, a program of education for mortgage agents approved by the Superintendent.

 Mortgage brokers

• Sole proprietors, partners, and officers or directors associated with a Registrant would be exempt from satisfying new education and experience requirements for brokers if they apply for a mortgage broker’s licence before the date the new Act comes into force.

• Mortgage agents listed with FSCO as authorized to deal in mortgages on behalf of a Registrant, who have completed the Seneca Financial Services Underwriting program, its predecessor the former Seneca Mortgage Broker Program, or the Mortgage Brokers Course sponsored by the Ontario Mortgage Broker’s. Association (OMBA), would be exempt from satisfying new education and experience requirements for brokers if they apply for a mortgage broker’s licence before the date the new Act comes into force.

• Real estate brokers registered under the Real Estate and Business Brokers Act, 2002 would be exempt from satisfying new education and experience requirements for brokers if they apply for a mortgage broker’s licence before the first year after the new Act comes into force.

• An individual who at the date the new Act comes into force is enrolled in the Financial Services Underwriting Program offered by Seneca would be exempt from satisfying the new educational and experience requirements for brokers if he/she applies for a mortgage broker’s licence within one year after completion of the program