Changes to Mortgage Brokerage

OACIQ – PRIOR TO MAY 1, 2020

A mortgage broker licence is issued to a person who meets the following requirements:

1. Has successfully completed a recognized basic training program;
2. Has demonstrated a knowledge of the official language of Québec;
3. Has passed the certification examination;
4. Has applied for a licence.

(S. 1 of the Regulations of the Regulation respecting the issue of broker’s and agency licences)

AMF – AS OF MAY 1, 2020

To obtain a certificate from the AMF, aspiring representatives must complete the following career entry process:

1. Meet the minimum training requirements;
2. Pass the required AMF examinations;
3. Complete a 12-week workplace probation period under the supervision of a mortgage broker;
4. Apply for a certificate.

OACIQ – PRIOR TO MAY 1, 2020

A broker or agency licence holder must pay the civil liability insurance premium to FARCIQ. (Ss. 8 and 17 of the Real Estate Brokerage Act)

AMF – AS OF MAY 1, 2020 

Firms, independent representatives and independent partnerships must hold private insurance.

If you were licensed to practise mortgage brokerage before May 1, it is important that your new liability insurance product covers acts prior to May 1.

OACIQ – PRIOR TO MAY 1, 2020

Fees and contributions related to the real estate brokerage licence are payable to the OACIQ.

AMF – AS OF MAY 1, 2020

Fees and contributions for the mortgage brokerage practice are payable to the AMF.

OACIQ – PRIOR TO MAY 1, 2020

• On own account.
• On behalf of an agency.

A mortgage broker may not act on behalf of more than one agency.
(S.11 of the Real Estate Brokerage Act)  

AMF – AS OF MAY 1, 2020

• On behalf of a firm, a corporation duly registered as a firm with the AMF.
• As an associate or employee of a partnership registered as an independent partnership with the AMF.
• As an independent representative.

   

An independent representative may act on behalf of more than one firm.

OACIQ – PRIOR TO MAY 1, 2020

Acquired rights consist in the possibility of obtaining, within 12 months following the revocation of one’s licence, the issuance of a same-category licence without having to successfully complete a recognized basic training program and pass the OACIQ certification examination.

A person who applies for a real estate broker’s licence within 3 years of the revocation of his real estate broker’s licence and who has held a mortgage broker’s licence or a restricted real estate broker’s licence thereafter is also entitled to this exemption, provided that his licence has not been revoked or suspended for a period of at least 12 months.
(S. 1 of the Regulation respecting the issue of broker’s and agency licences)

AMF – AS OF MAY 1, 2020

A person whose broker’s licence was revoked between May 1, 2019 and April 30, 2020 may apply for a mortgage brokerage certificate from the AMF as of May 1, 2020.

Persons who are not in this situation will have to complete the AMF’s career entry process before they can apply for a certificate (training, examinations, probation period).

The acquired rights related to the right to practice granted to you by the OACIQ will cease on April 30, 2020.

OACIQ – PRIOR TO MAY 1, 2020

Mortgage referral is a brokerage transaction.

A person who, for others and in return for remuneration, engages in a brokerage transaction relating to a loan secured by immovable hypothec must hold a licence issued by the OACIQ.
(S. 4 of the Real Estate Brokerage Act)

AMF – AS OF MAY 1, 2020

Only holders of a mortgage brokerage certificate may engage in a brokerage transaction relating to a loan secured by immovable hypothec for others and against remuneration depending on the conclusion of such a loan.

Real estate brokers who are not holders of a mortgage brokerage certificate may continue to refer clients directly to mortgage lenders and be remunerated by lenders as long as the remuneration is not contingent upon the conclusion of a loan.

Real estate brokers may, however, refer clients to a representative holding a mortgage brokerage certificate and receive a share of his commission from him.

OACIQ – PRIOR TO MAY 1, 2020

A mortgage broker may also practice as a real estate broker.

AMF – AS OF MAY 1, 2020

A representative holding a mortgage brokerage certificate may simultaneously hold a real estate brokerage licence only if he is not also registered with the AMF as an insurance representative, a claims adjuster or a financial planner.

OACIQ – PRIOR TO MAY 1, 2020

A licence holder proposing to act as lender in connection with a loan secured by immovable hypothec cannot represent the borrower. Before entering into an agreement with the borrower, the holder must terminate any binding brokerage contract.

The broker must in such a case inform the borrower in writing that the broker is not acting as a representative and that the borrower may seek representation by a licence holder of his or her choice
(S. 19 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising)

AMF – AS OF MAY 1, 2020

Mortgage brokers should not put themselves in a conflict of interest. They must act independently towards their clients and in the best interests of their clients.

OACIQ – PRIOR TO MAY 1, 2020

For the 2019-2020 cycle of the MCEP:
A mortgage broker must accumulate 9 CEUs, including:

• 4 CEUs by completing 2 mandatory OACIQ training activities;
• 5 elective CEUs from the Directory of accredited training activities.

A mortgage agency executive officer must accumulate 12 CEUs, including:

• 4 CEUs by completing 2 mandatory OACIQ training activities;
• 8 elective CEUs from the Directory of accredited training activities.

For the 2019-2021 cycle of the MCEP:
A real estate broker must accumulate 18 CEUs, including:

• 8 CEUs by completing 4 mandatory OACIQ training activities;
• 10 elective CEUs from the Directory of accredited training activities.

A real estate agency executive officer must accumulate 24 CEUs, including :

• 10 CEUs by completing 5 mandatory OACIQ training activities;
• 14 elective CEUs from the Directory of accredited training activities.

AMF – AS OF MAY 1, 2020

A mortgage representative will be required to accumulate, in addition to any OACIQ CEUs not obtained during the 2019-2020 cycle, 24 CEUs, including:

• 3 CEUs by completing trainings on compliance, ethical standards and rules of conduct, or professional practice in the field of mortgage brokerage;
• 6 CEUs by completing trainings on the mortgage brokerage activity for licences issued prior to May 1, 2010.

The responsible officer of a mortgage agency will be required to accumulate 6 additional CEUs.

OACIQ – PRIOR TO MAY 1, 2020

A licence holder must ensure that the proposed loan secured by immovable hypothec is suitable for the party represented in view of the party’s needs and financial capacity and the circumstances.
(S. 48 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising)

AMF – AS OF MAY 1, 2020

The representative holding a mortgage brokerage certificate will be required to:

• Explain the nature and scope of his services;
• Evaluate the client’s financial situation and identify his needs;
• Properly advise the client and provide all information that may be necessary or useful.

OACIQ – PRIOR TO MAY 1, 2020

A licence holder engaging in a brokerage transaction in relation to a loan secured by immovable hypothec must without delay give a written disclosure statement to the borrower, in accordance with generally accepted practice, containing all pertinent facts relating to the loan applied for.

The disclosure statement must specify the following in particular:

1. the cost of borrowing associated with the loan applied for by the borrower;
2. any costs or penalties to be assumed by the borrower if the loan is not repaid at term or a loan payment is not made on its due date; and
3. all brokerage fees, if they are included in the amount borrowed and are paid directly by the lender to the broker or agency.

(S. 49 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising)

AMF – AS OF MAY 1, 2020

The representative holding a mortgage brokerage certificate will have to explain to his client:

• The cost of the loan;
• All costs to be assumed;
• The features, advantages and disadvantages of the loan, including the impact on the client’s financial situation, as well as the penalties and the circumstances in which they will apply.

OACIQ – PRIOR TO MAY 1, 2020

A licence holder must without delay make a written disclosure of the following information to the borrower retaining the holder’s services so that the holder may act as the intermediary for a loan secured by immovable hypothec:

1. the number of lenders who in the previous 12 months have made loans for which the broker or agency acted as the intermediary; and
2. the fact that the broker or agency in the previous 12 months was a lender while brokerage or agency services were retained so that the broker or agency could act as the intermediary for a loan secured by immovable hypothec.

On request, a licence holder must without delay make a written disclosure to a borrower:

1. of the fact that the broker or agency in the previous 12 months was the lender of more than 50% of the total number of loans secured by immovable hypothec for which the broker’s or agency’s services were retained so that the broker or agency could act as the intermediary; and
2. of the name of the lender that, if applicable, made more than 50% of the total number of hypothecary loans or loan renewals for which the broker or agency acted as the intermediary during the previous 12 months.

(S. 52 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising)

AMF – AS OF MAY 1, 2020

The representative holding a mortgage brokerage certificate will have to disclose the following in writing to his client:

• The number of lenders who, in the previous 12 months, have made loans secured by immovable hypothec for which the representative and the firm or the independent partnership on behalf of which he acts have carried out a brokerage transaction.
• The name of the lender of more than 50% of the total number of loans secured by immovable hypothec or mortgage renewals for which the representative, the firm or the independent partnership on behalf of which he acts, have carried out a brokerage transaction during the same period.

OACIQ – PRIOR TO MAY 1, 2020

Every remuneration agreement in favour of a licence holder that may place the interest of the licence holder in conflict with that of a party to a transaction must be disclosed to the party in writing.

In addition, the licence holder must without delay make a written disclosure to that party stating the identity of the other person or partnership from which the remuneration is owing, the nature of the holder’s relation with that person or partnership, and the nature of the remuneration owing if it is a non-monetary benefit.
(S. 36 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising)

AMF – AS OF MAY 1, 2020

The representative holding a mortgage brokerage certificate will have to disclose to the client:

• His method of remuneration;
• Any incentives in connection with the services or commission sharing.

OACIQ – PRIOR TO MAY 1, 2020

A mortgage broker may not enter into a loan secured by reverse immovable hypothec with a borrower unless the holder receives from the borrower a written statement signed by an advocate or a notary stating that the advocate or notary has given the borrower independent legal advice concerning the proposed loan.

(S. 59 of the Regulation respecting brokerage requirements, professional conduct of brokers and advertising)

AMF – AS OF MAY 1, 2020

The representative holding a mortgage brokerage certificate must receive from the borrower a written statement signed by an advocate or a notary stating that the advocate or notary has given the borrower independent legal advice concerning the proposed loan prior to carrying out a brokerage transaction concerning such a loan.

OACIQ – PRIOR TO MAY 1, 2020

A broker or agency must keep the following registers at the establishment:

• Register of its brokerage contracts;
• Register of its transactions;
• Accounting registers on the amounts held in trust by the broker or the agency;
• Register of disclosure notices;
• Register on the accounting of the broker or the agency;
• Register of the brokers acting for the agency.

(S. 2 of the Regulation respecting records, books and registers, trust accounting and inspection of brokers and agencies)

AMF – AS OF MAY 1, 2020

The representative holding a mortgage brokerage certificate must keep the following records and registers:

• Accounting books and registers;
• Register of separate account;
• Record for each client;
• Register of commissions (and commission sharing);
• Register of incentives.