IMBA to deliver FSCO’s mandatory re-licensing education for mortgage brokers and mortgage agents

The Independent Mortgage Brokers Association of Ontario (IMBA) has been selected by the Financial Services Commission of Ontario (FSCO) to deliver the mandatory re-licensing education course for 2012. IMBA was instrumental in the development of this initiative as part of its mandate to elevate the level of professionalism in the mortgage brokerage industry.

IMBA will offer the course in both a convenient on-line format as well as an in-class option for those who prefer classroom learning. The course will be available starting November 1, 2011. Details regarding registration, on-line and in-class schedules, classroom venues and IMBA’s economical prices will be available by October 15, 2011.

IMBA, a not-for-profit association for Ontario’s licensed mortgage brokers and mortgage agents, will invest a significant portion of the revenue that it will receive to finance additional initiatives for the advancement of the mortgage brokerage industry in the province.

FSCO has set March 31, 2012 as the deadline for completing this new requirement for all mortgage brokers and mortgage agents who are licensed in the province of Ontario. The 5-hour course is intended to improve the mortgage brokerage industry’s rate of compliance with the MBLAA, 2006. The following topics will be addressed in the course:

Compliance Overview

• Describe the requirements set out in the compliance checklist for brokerages, brokers and agents
• Explain the role and obligations of the principal broker

Complaint Handling

• Describe the roles and responsibilities of the brokerage, broker/agent and FSCO with respect to consumer complaints
• Identify the circumstances in which a broker/agent should notify the principal broker of a complaint
• Discuss the types of complaints faced by agents, brokers and brokerages and possible approaches to resolving complaints

Errors and Omissions Insurance

• Discuss the brokerage licensing requirement to have and maintain errors and omissions insurance that includes fraud coverage and the consequences of not meeting this licensing condition
• Assess whether a specific coverage is in a form acceptable to the Superintendent
• Describe reporting obligations of brokerages, brokers and agents if coverage lapses

Reporting Requirements

• Identify the circumstances in which changes to contact information must be reported to FSCO
• Describe how to notify FSCO of changes to a licencee’s contact information or status
• Discuss the consequences of failing to comply with the reporting requirements under various scenarios

Advertising Requirements

• Summarize the standards (print and electronic) related to advertising and representation to the public that apply to the mortgage brokerage industry
• Describe what steps are necessary in order to enable clients to be sure they are dealing with a licensed and qualified brokerage, broker or agent
• Assess various advertising scenarios to determine whether they comply with the requirement to prominently disclose authorized name and licence number in all public relations

Ensuring mortgage is suitable for the client

• Describe how to take reasonable steps to ensure a mortgage or investment presented is suitable for a borrower, lender or investor
• Determine the kinds of questions to discuss with the client as part of establishing whether a mortgage is suitable in various situations
• Identify material risks and clarify all relevant aspects of the mortgage transaction for the client
• Use plain language to disclose risks to clients in writing
• Understand how to act in the best interest of the client

Disclosing fees and incentives

• Understand how to prepare written disclosure and obtain written acknowledgement that disclosure was made regarding:
  • Whether the brokerage receives fees in connection with the mortgage, and if yes, the identity of the person or entity providing the fee and the basis of the fee calculation
  • Whether the broker or agent receives an incentive from another person or entity, and if yes, the nature of the incentive and the identity of the person or entity paying it
  • Whether the brokerage paid a fee to another person or entity in connection with arranging the mortgage, and if yes, the identity of the other person or entity, the basis for calculating the amount, and if other than money, the nature of the benefit
• Identify potential conflicts of interest and describe how to disclose them to clients in writing