Mortgage Brokering Regulation and Compliance
The regulatory frame
In Ontario, mortgage brokering is governed by the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) and its regulations, administered by the Financial Services Regulatory Authority of Ontario (FSRA). Candidates must know who must be licensed (brokerages, brokers, agents, and administrators), what each licence permits, and that a brokerage licence is held by the business entity while individual licences attach to people. Agents may only deal or trade in mortgages on behalf of their sponsoring brokerage - never independently.
Core compliance duties
Know the disclosure and suitability obligations: identifying the borrower's needs and circumstances, disclosing remuneration and conflicts, providing required written disclosures before a transaction, and keeping records. Understand the difference between dealing (assisting a borrower to obtain a mortgage) and trading (buying or selling an existing mortgage). Cost-of-credit disclosure, the prohibition on false or misleading advertising, and the requirement to verify and retain client information are recurring themes.
Traps in questions
The classic trap is the unlicensed activity: an agent acting for a private lender without brokerage sponsorship, or a brokerage operating without a principal broker. Another trap is confusing federal and provincial roles - FSRA licenses conduct; federal bodies regulate banks and certain lending products. Watch for questions about referral fees paid to unlicensed persons, which are generally prohibited, and about advertising rules that require the brokerage name and licence details.
Worked rule of thumb
When unsure, apply the sponsorship test: does the individual act in the name of, and under the supervision of, a licensed brokerage? If not, the conduct is non-compliant regardless of how the transaction is structured.