The Independent Mortgage Brokers Association of Ontario (IMBA) has put out an excellent interpretive document summarizing several new rules being introduced by FSCO.
Here’s the link.
If you’re an Ontario mortgage broker, have a read through it. These rules will take effect on Thursday.
Here is a small sampling of things for brokers and agents to remember:
- Mortgage agents can no longer call themselves anything other than “Mortgage Agent” or “Agent” when doing business in Ontario.
- The authorized name and licence number of a Broker or Agent’s Brokerage must be prominently displayed on all promotional materials.
- You must disclose if you are receiving a finder’s fee, bonus, basis points or any other remuneration on the mortgage, and the method of calculation of these
payments. - You need to disclose the number of lenders your Brokerage acted for in the previous fiscal year.
- The cost of high ratio mortgage default insurance will no longer need to be included in the cost of borrowing.
- You must disclose any and all material risks of a particular mortgage and clearly establish why the mortgage you recommend is suitable for the client.
More information can be found on IMBA’s Mortgage Legislation page.
FSCO is Ontario’s regulator of the mortgage brokering industry.
Last modified: April 29, 2014
You need to disclose the number of lenders your Brokerage acted for in the previous fiscal year.
This is going to be interesting for many brokers that do not shop around for the best needs of there clients, too many one stop shop and get comfortable with a particular underwriter, product, program, etc. and do not look after the true needs of their client.
Joe,
Totally agree.
I’ve seen stats of some agents who do over 80% of their business with one lender. It makes me ill because I know that lender (as big and as popular as they are) doesn’t always have the best products.
Thankfully, these are the minority of agents I’ve come across, and they will slowly be weeded out thanks to rules like this and more educated borrowers.
Cheers,
Rob
Hi Rob,
What does it mean by acted for? Does it mean the number of different lenders that the firm has closed deals with over the last 12 months?
Hi Josh,
Thanks for the post. This stuff is brand new and still unclear to me personally. I better defer to FSCO or IMBA on the official answer.
From what I’ve read, however, it seems like it’s the number of lenders the Brokerage closed deals with in the Brokerage’s previous fiscal year.
Cheers,
Rob