For mortgage brokers without face-to-face business models, the Internet makes it easy to close mortgages in another province. And a lot of brokers are doing just that, but not always legally.
That’s partly why the Mortgage Broker Regulator’s Council of Canada (MBRCC) put out this new tool.
They call it the Multijurisdictional Licensing Information Tool. It’s meant to help brokers know when they need to be licensed to work with a borrower in another province. CMT spoke with Martin Boyle, Policy Manager at the MBRCC for more details.
Mr. Boyle provided clarification on four broker FAQs (frequently asked questions) surrounding interprovincial brokering:
1.If a broker has an existing client who moves from the province that broker is licensed in to a province that broker is not licensed in, can that broker and client still work together on a mortgage?
Martin: The short answer is yes, the broker can still work with a client who has moved to another province. Brokers are not prohibited from working with clients when they are not in the same province. The question becomes which licensing rules apply when the broker and client are in different provinces. Depending on the province in which the client is now located and the specifics of the mortgage transaction, the mortgage broker may also need to be licensed in that province as well.
The MBRCC Multijurisdictional Licensing Information Tool was design to help brokers by providing guidance on the licence(s) they would likely need if they are working with a client in another province and/or if the property was in another province.
2.If a broker gets a new client from a province that the broker is not registered in, can that broker “co-broker” the mortgage with a 2nd broker who is licensed in that province?
Martin: Each province has its own rules regarding when a licence is required. The rules that apply, and whether or not an additional licence would be required for the 1st broker in your example, depends on the provinces involved in the transaction. Also, how the 1st broker “gets” the new client could potentially be a factor for consideration (wherever an individual is “holding out” as a broker is considered the location of the broker).
It is recommended that any brokers involved in a transaction as described in [this] question contact the regulatory authority from each province to determine the licensing rules that apply. The following MBRCC webpage includes links to the provincial regulators: Link
3.The licensing tool says the following about an out-of-province broker working with an Alberta client on an Alberta property: “Alberta licensing rules would apply. A “substantial connection test” would need to be conducted by RECA to determine whether you need to be licensed in Alberta for this transaction.” What does that mean exactly?
Martin: The Real Estate Council of Alberta (RECA) is Alberta’s regulatory authority for mortgage brokering. They have identified a series of factors that they consider when determining whether an Alberta licence is required for transactions with elements outside Alberta’s boundaries. The process for making this determination is called a “substantial connection test.” The following link provides further information on RECA’s substantial connection test: Link
4.Which provinces have reciprocity for mortgage agents? In other words, if you’re licensed in AB, BC, MB, SK, NB, NL, NS, ON or QC, can you apply for an accelerated approval in the other provinces, with no need to take an educational course in that other province?
Martin: Licensing reciprocity arrangements are intended to promote labour mobility by recognizing the occupational standards from other provinces. Reciprocal licensing arrangements apply to those provinces that license individuals (i.e., B.C., Alberta, Saskatchewan, Manitoba, Ontario and Quebec). Through these arrangements applicants are eligible for licensing reciprocity without additional educational requirements provided the provinces have occupational equivalents.
Sidebar: Visit this page on MBRCC’s website for reciprocal licensing information from various provinces (For information on the process in Manitoba, please contact the Manitoba Securities Commission directly).