Mortgage Broker LicenseSubprime mortgage broker license
Whilst changes to the Old Law have been under discussion for many years, it is the rise in mortgage frauds in recent years that has lent priority to the new law. In implementing this new law, the aim of the Province Council was not only to cut mortgage scams, but also to strengthen the level of customer service, to upgrade and modernise the rules governing the provision of finance and to promote greater competitiveness and freedom of choice for users.
This new law is much more expansionary in its regulation system as it has significantly broadened the scope of mortgage intermediation. According to the new law, you must have a broker's license before you can trade or trade mortgage or mortgage loans or manage them.
Companies, unincorporated firms, individual enterprises and regulated units that conduct the trade in mortgage loans, the trade in mortgage loans or the granting of loans to secure properties require a broker license. When they are pursuing the mortgage administration franchise, they need a mortgage manager license.
Persons indemnified for trade or mortgage in Ontario, as an employee, or otherwise, must be licenced as mortgage broker or mortgage broker. To qualify for a license, mortgage broker and broker must comply with certain education and training requirements set by the Financial Services Commission of Ontario ("FSCO").
According to the regulations, mortgage intermediaries must successfully undergo an authorised training programme within two years before they can apply for a license. For mortgage intermediaries, they must successfully follow a training programme within three years and take a recognised aptitude test before they can apply for a license. FSCO Superintendent shall have the power to dispense with these training conditions if it is convinced that the person has a suitable training and skill mix.
Under the new scheme, those who might be most affected by the authorisation obligations are considered to be creditors from outside. According to the Old Law, residential mortgages were a totally non-regulated area. Under the new law, however, any individual creditor involved in granting credit will no longer be permitted to grant mortgage credit unless he obtains a broker's license.
Whilst many creditors find these license terms annoying, there is every expectation that such license terms will better safeguard the interests of consumers. Under the new law, a number of general and special exceptions to authorisation obligations are provided for. Thus, for example, 6 of the new law provides that banks are exempted from the authorisation obligation as they are already heavily regulated and have extensive safeguards for consumers.
Staff members of banks are also exempted from being admitted as mortgage intermediaries or mortgage intermediaries. Single persons and companies offering basic references are also exempted from authorisation obligations. A derogation from the admission rules for attorneys also exists. According to the Ordinance, attorneys do not have to be admitted if "the attorney, within the scope of his profession as an attorney, performs one of the activities of mortgage intermediation on account of a principal and the attorney does not claim to be performing an act governed by the new Act.
" It does not mean that an attorney could become a mortgage broker without being licenced, but offers attorneys the opportunity to help a mandator who has otherwise been assigned to carry out work. To better serve the consumer, all licence holders will be obliged to respect the behavioural requirements imposed by the new law.
Among these commitments is the obligation for mortgage managers and brokers to take out an error and default policy with enhanced cover for losses arising from frauds. Furthermore, each borrowers must be required to disclose the credit costs associated with a mortgage. The Superintendent of the FSCO is authorized to investigate and investigate the operations and activity of each Licencee to assure adherence to the new Act.
Among the rights conferred on the Superintendent is the right to inspect the offices of each of the licensees and to confiscate or freeze the property of a license holder. Failure to abide by the new law may lead to penalties of up to $25,000 for mortgage managers and up to $10,000 for estate agents and/or agent.
Aim of the new license system, which came into effect in Ontario on July 1, 2008, is to safeguard creditors and borrower equally by establishing obligatory checks in the mortgage environment. Hopefully it will ensure that every mortgage broker, broker, broker, brokers and administrators receives a license to help cut mortgage scams.