New MortgageThe New Mortgage
Downtown Luke Shaw, a finance researcher, and his fiancee Laura purchased their first house in 2015, a three-bedroom semi-detached house in Leeds, for 135,000 pounds. A five-year fixed-rate mortgage from the Yorkshire Building Society was taken out at 95 per cent mortgage-to-value ratio and paid an interest of 2.05 per cent. 2.05 per cent was paid at the end of the year. At less than 18 month to maturity, Luke, 29, and Laura, 34, want to consider their stock option plans.
Mortgages Ordinance Act - the new system
The Nova Scotia Legislative adopted the Mortgage Regulation Act ("MRA") in May 2012. MRA has not yet entered into effect, but in this case it will supersede the Mortgage Broker and Lender Registration Act and, in combination with the provisions enacted under the MRA (the "MRA Regulations"), introduce a new system of regulation for mortgage broker, mortgage broker, associated mortgage broker, mortgage broker, mortgage lender and mortgage manager.
An outline of the proposals for MRA Regulations (the "Draft MRA Regulations") was published in September 2017. The customer update is drafted on the basis of the MRA and MRA regulations, which can be changed until publication. Except for some exemptions, mortgage intermediaries, mortgage intermediaries, mortgage intermediaries, associated mortgage intermediaries, mortgage financiers and mortgage managers must be admitted in order to do transactions in Nova Scotia (MRA, s. 12(2)).
The MRA will have different categories of licenses for mortgage intermediaries, mortgage intermediaries, associated mortgage intermediaries, mortgage creditors and mortgage managers (MRA, see 12(1)), and different sets of licensing regulations will be applied to licence holders holding different categories of licenses. Claimants must fulfil the relevant eligibility conditions and must comply with the provisions of the MRA and the MRA Regulations.
In the draft MRA Regulations, the suggested license terms for lenders, brokers, brokers and administrators (the "License Terms") describe the expected requirements for potential licensors or licencees to purchase or extend a particular license category. Under the terms of the license, the license expires on October 31 of the year following the year in which the license was purchased or renewal (License Terms, Section 8).
MRA does not cover people or groups of people who are exempt from its implementation by the MRA regulations (MRA, see 3(11)). As part of the draft MRA Regulation, the exemption provisions of the Mortgage Regulation Act suggested (the "exemption provisions") enumerate the individuals and groups that are likely to be exempt from the MRA.
Such individuals and bodies include: banking and authorised overseas banking (see 3(a)); fiduciary and financial institutions (see 3(b)); co-operative financial institutions (see 3(c)); insurers (see 3(d)); individuals conducting mortgage brokerage or mortgage financing transactions in relation to a mortgage of more than $1,000,000,000 each, provided that:
- the costs of the lending do not include the mortgage; and - the mortgage investor (s) are not considered to be a retail investor or, if one or more of the mortgage investor (s) is/are a retail investor, a licensee or an exempt person acting on their account as an intermediary for the mortgage (§ 3(f)). Derogations in the exemption regulations also provide for a number of derogations.
Under certain conditions, e.g. attorneys, receivers and other people, it is likely that they can act as mortgage agents or mortgage managers without being licenced (Exemption Rules, p. 5). An individual or firm is also likely to be able to act as a mortgage lender without obtaining a license, provided they borrow their own funds and carry out mortgage transactions over a 12-month term in relation to four or fewer mortgage loans that have a cumulative value of less than $1,000,000,000 (exemption rules, see 6(a)).
Lastly, it is likely that cooperative banks will be able to act as mortgage providers without obtaining a licence (exemption rules, see 6(b)). Nevertheless, as these are derogations, many of the MRA and MRA Regulations continue to be applicable to individuals who are partly excluded from the MRA and MRA Regulations.
If the MRA enters into effect, persons and bodies managing mortgage agents, mortgage brokerages, mortgage lending or mortgage management will be obliged to meet a number of disclosures, reports and recording obligations. Some of these requests have been incorporated into the MRA, but many of them are described in the MRA's draft regulations, namely those:
Disclosure requirements; costs of lending Disclosure requirements; In additional, licence holders are obliged to adhere to the mandatory codes of practice. MRA draft regulations contain codes of practice for each category of licence holder. Once the MRA comes into effect, it is a criminal offense for a perpetrator not to abide by the MRA, the MRA regulations or an order issued by the registrar (MRA, p. 69(1)).