Mortgage Brokering Regulation and Licensing in Ontario
The statutory framework
Mortgage brokering in Ontario is governed by the Mortgage Brokerages, Lenders and Administrators Act (MBLAA) and administered by the Financial Services Regulatory Authority of Ontario (FSRA). FSRA licenses brokerages, brokers, agents, and administrators. Only a licensed brokerage can hold a mortgage brokerage licence; individual brokers and agents must be authorized under a brokerage and cannot deal in mortgages independently.
Conduct and duties
Licensees owe duties of honesty, good faith, and disclosure. Key obligations include: verifying a borrower's identity and assessing suitability; disclosing conflicts of interest; providing written disclosure of fees and the nature of the relationship (for example, whether you act for the borrower or lender); and keeping records. Principal brokers supervise agents and ensure compliance. A candidate must know the difference between a broker and an agent (both licensed, but the broker typically has supervisory/authority roles) and the concept of the brokerage as the licensed entity.
Traps in exam questions
Watch for scenarios where an unlicensed person is paid a fee for arranging a mortgage - that is prohibited. Another trap: assuming an agent can operate without a brokerage. Also distinguish FSRA's regulatory role from consumer complaint processes; and remember that licensees must not make false or misleading statements.
Worked example / rule of thumb
Rule of thumb: "No brokerage, no deal." If a question describes an individual arranging or negotiating a mortgage for compensation, ask: is there a licensed brokerage behind them? If not, the conduct is non-compliant. For fees, remember that all fees must be disclosed in writing and agreed before the service.