February 17, 2016 - Issue 28
2016 Licence Renewals for Mortgage Brokers and Agents
All mortgage broker and agent licences will expire on March 31, 2016. If you are currently licensed as a mortgage broker or agent in Ontario, and want to continue doing business after March 31, 2016, you must renew your licence on or before March 31, 2016.
You will not be authorized to deal or trade in mortgages after March 31, 2016, unless FSCO has processed and approved your licence renewal application(s). This means, if you wait until close to the deadline, you may experience a licensing gap. You can avoid this by applying early and are strongly encouraged to submit your renewal application(s) in February.
The Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) requires all brokers and agents dealing with mortgages to have a valid license. Failure to have a valid license contravenes the legislation and may be subject to regulatory action. Refer to Renewing a Mortgage Broker or Agent Licence to learn more.
Continuing Education (CE) Requirements
As of early February, less than 40% of mortgage brokers and agents have registered for the mandatory CE training. All mortgage brokers and agents who intend to renew their licences in 2016 must
complete the mandatory 2016 Ontario Continuing Education (CE) Course for Mortgage Brokers and Agents
before their principal broker can initiate their licence renewal application
The five-hour course covers professional practice, private lending and investing. It is available in both classroom and online formats. You can register for the course by contacting one of these providers:
For more information on the CE requirements, refer to FSCO's frequently asked questions (FAQs) on the 2016 Continuing Education Requirement for Mortgage Brokers and Agents.
Regulated Fraud Prevention Measures in Effect as of January 1, 2016
Amendments to the Standards of Practice regulations for mortgage brokers and agents (O. Reg.187/08 ), mortgage brokerages (O. Reg.188/08 ) and mortgage administrators (O. Reg.189/08 ) came into force on January 1, 2016.
The amendments require that:
- Licensees cannot ignore signs of potential fraud.
- Brokerages have a continued duty to advise lenders if they doubt the accuracy of a borrower's application after a mortgage agreement has been finalized.
- Brokerages cannot accept an advance payment when the principal amount is $400,000 or less.
FSCO encourages brokers and agents to ensure their business practices comply with regulation requirements. Failure to do so may result in regulatory action.
Annual Information Return (AIR)
Mortgage brokerages and administrators are legally required to file the 2015 AIR no later than March 31, 2016. The AIR covers the period of January 1 to December 31, 2015. Mortgage brokerages and administrators that fail to submit the AIR by March 31, 2016 may be required to pay an administrative monetary penalty of $1,000. Non-compliance increases FSCO's regulatory costs and impacts the fees that all licensees pay.
The AIR collects information from mortgage brokerages and administrators about their business practices, internal controls and market conditions. You can view the 2015 AIR questions in advance.
To learn more:
In order to file, brokerages and administrators must:
Important Enforcement News:
In 2015, FSCO issued 47 enforcement actions against entities involved in the mortgage sector ranging from Administrative Monetary Penalties (AMPs) to Cease and Desist Orders. All infractions resulted from failure to comply with the regulated standards of practice, including soliciting business without a licence, sale of unsuitable products to consumers, lack of disclosures and unethical behavior while soliciting business.
Included in these were six AMPs ordered to agents that did not respond to the Superintendent's 2014 Questionnaire (average AMP$1000), and three Cease and Desist Orders to entities for soliciting syndicated mortgage investments without a licence, or for failure to comply with disclosures required in regulation. To view all public enforcement notices, refer to FSCO's Enforcement Activities – Mortgage Brokering Sector