New Mortgage Act Enhances Protection For Homeowners
New Licensing Requirements In Effect July 1, 2008
The Ontario Government has taken an important step to enhance consumer protection in the mortgage brokering industry. The new Mortgage Brokerages, Lenders and Administrators Act, 2006 comes into effect on July 1, 2008.
The act provides improved disclosure for consumers. For example, brokerages will be required to disclose material risks of each mortgage, potential conflicts of interest, and expanded information about fees. Brokerages will be required to establish policies and procedures to implement the new disclosure requirements by January 1, 2009.
Consumers will be able to access a new public register of licensed mortgage brokerages, administrators, brokers and agents on FSCO's website.
Requirements under the new act:
- Businesses and individuals who conduct mortgage brokering activities in Ontario are to be licensed with the Financial Services Commission of Ontario.
- Mortgage brokers and agents now need to meet specific education, experience and suitability requirements.
- Mortgage brokerages are now required to appoint a principal broker to ensure their brokers and agents are adequately supervised and requirements are followed.
- Mortgage brokerages are now more responsible for the actions of their brokers and agents.
- Mortgage brokers will, for example, be restricted from tied selling and will have to disclose the brokerage's relationships with lenders.
For valuable consumer resources and a full list of mortgage brokerages, administrators, brokers and agents, visit the Financial Services Commission of Ontario website at: www.fsco.ca
- The act and regulations require all mortgage brokers and agents in Ontario to be at least 18 years of age; work for only one mortgage brokerage; meet specific education requirements; conduct all activities in accordance with the new act and regulations; and be adequately supervised by a principal broker.
- The Financial Services Commission of Ontario (FSCO) is an agency of the Ministry of Finance.
- FSCO is responsible for regulating the activities of all mortgage brokerages, administrators, brokers and agents throughout the province.
- Visit the Financial Services Commission of Ontario website at www.fsco.ca
- Visit the Ministry of Finance website at www.fin.gov.on.ca
- Visit the Canadian Association of Accredited Mortgage Professionals website at www.caamp.org
- Visit the Independent Mortgage Brokers Association of Ontario website at www.imba.ca
- Visit the Ontario Real Estate Association website at www.orea.com
“Buying a home is likely the most important financial decision a family will make. The updated requirements for mortgage professionals will encourage more competition and enhance professionalism in the mortgage brokering industry.”