Canadian Mortgage Professional wrote a good story on Ontario’s new broker legislation. It touches on how Ontario will soon enact Standards of Practice regulations. Among other things, CMP says the draft regulations are expected to include rules regarding:
Verification of the borrower’s identity
Lawyers do this currently. It should be interesting to see if FSCO’s requirements of brokers are somehow redundant.
Informing the lender of information the brokerage feels may be inaccurate
This could make it harder for those edge-seekers who “tweak” the facts to get a deal approved.
Informing the borrower if it deals with a lender who funds over 50% of its transactions
This is a good one but the number should be lower than 50%. Even brokers doing 1/3 of their volume with one lender should explain why they rely on one lender so much. (That said, there are sometimes legitimate reasons for it.)
Informing the borrower of the number of lenders it represented during the previous year
This should be a fan favourite. If a broker refers clients to just 3-4 lenders, there may be something wrong (perhaps the broker is thinking “incentives first,” is not up on their product knowledge, etc.) There are naturally exceptions to this as well.
Ensuring that the mortgage is suitable for the client and the risks are explained
Providing disclosure in clear language
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