Secteur du courtage hypothécaire
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Date de remise des commentaires

Consultation sur la ligne directrice proposée relative aux nouvelles exigences relatives à la délivrance de permis des agents et courtiers en hypothèques

L’Autorité ontarienne de réglementation des services financiers (ARSF) appuie la proposition du gouvernement d’accroître les compétences et les connaissances des agents et courtiers en hypothèques en vue de mieux protéger les consommateurs et les investisseurs.

L’ARSF mène une consultation sur la ligne directrice proposée portant sur une nouvelle exigence en matière de formation en vue de l’ajout d’une catégorie de permis pour les agents en hypothèques qui effectuent des opérations sur des prêts hypothécaires privés ainsi que les courtiers en hypothèques. Le prêt privé est plus complexe et moins transparent que le prêt traditionnel accordé par des institutions financières réglementées. Les exigences actuelles en matière de formation ne font pas de distinction entre les prêts hypothécaires privés et traditionnels.

Le nouveau permis proposé aidera les agents et les courtiers à mieux servir les consommateurs et les investisseurs du marché croissant des prêts privés en relevant les normes de formation et en veillant à ce que ces derniers bénéficient des conseils et des produits hypothécaires appropriés. Il soutient également le principe de compétence du Code de conduite national du Conseil canadien des autorités de réglementation des courtiers hypothécaires (CCARCH).

La ligne directrice fournit des détails au sujet de la transition vers les nouvelles catégories de permis proposées. Ces détails rejoignent les modifications proposées au Règlement de l’Ontario 409/07 selon la Loi de 2006 sur les maisons de courtage d’hypothèques, les prêteurs hypothécaires et les administrateurs d’hypothèques qui font actuellement l’objet d’une consultation. Si elles sont approuvées, les nouvelles catégories de permis entreraient en vigueur le 1er avril 2023.

Cette consultation est maintenant terminée.

Liens utiles

Nous vous remercions de votre rétroaction sur la ligne directrice proposée relative aux nouvelles exigences relatives à la délivrance de permis des agents et courtiers en hypothèques. Vos commentaires ont éclairé la formulation de notre ligne directrice définitive, que nous avons maintenant publiée. Un résumé des commentaires des intervenants est maintenant disponible.


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Secteur Commentaire Date postée Trier par ordre croissant
Secteur du courtage hypothécaire
[2022-002] Katie Caravaggio - Mortgage Professionals Canada
Regarding the new licensing levels proposed: The current broker course is geared towards the role of the Principal Broker and how to start a brokerage. Based on our lead instructor’s observations from delivering the broker course over the last few years (as well as course surveys and feedback), these topics, while extremely important, is not what most people taking the broker course plan to do. We are suggesting possibly breaking the licensing into the following categories:

Agent: the updated agent course to include more practical elements (application submissions, more case studies, etc.)
Broker: Private lending, MIC, and mentor/training agents
PB: Starting a brokerage

Challenge Exam: Will the date to complete and pass the challenge exam remain the same as the last date to become fully licenced under the new licensing categories? If so, this may present a problem. If a portion of the tenured licensees wait until the last minute to complete the challenge exam (as we know some do!), and end up failing, we may run in to a situation where we have a lot of practitioners without a licence. We are proposing changing the completion date for the challenge exam to an earlier date to give licensees time to take the test again, in the event that they fail, or extend the completion dates for both.

As well, is FSRA requiring that licensing education providers provide some practice material or study guides for the individuals who would take the challenge exam to prepare?
Secteur du courtage hypothécaire
[2022-002] John Rider - Mortgage and Title Insurance Industry Association of Canada (MTIIAC)

Secteur du courtage hypothécaire
[2022-002] David Mandel - First Source Mortgage Corporation
Need to refocus some licencing and oversight practices FSRA and FSCO as it relates to consumer risks and risk assessment in the Mortgage Industry:

MICs: Are by far the most overlooked yet most active growth sector in the mortgage industry. MIC lenders deal through mortgage brokers who are licensed and trained in matters including mortgage selection, structure, risks of lending and borrowing, KYC and suitability as well as mountains of consumer disclosure. The average Canadian would assume quite readily that MIC managers, owners and senior staff have at least these same requirements. Why? MICs like mortgage syndicators market and build a pool of funds within a MIC structure (a tax efficient investment vehicle), which allows up to 50% of the MIC to invest in sophisticated commercial mortgages as well as residential mortgages. The pool of funds is raised through exempt market activities but ultimately receives funds from many consumers looking for investment yield typically using an intermediary.
While money managers and mortgage brokers are trained and must meet specific licensing requirements, MIC managers and MICs in general are exempt from education and licensing requirements and are therefore ripe for abuse and mismanagement.

Limited OSC and CRA oversight leaves the public at risk for possible abuse or negligence as it relates to lending operations of MICs. Over the last dozen or so years the real estate market has been so buoyant that mistakes or lack of knowledge in underwriting, loan selection, risk assessment and portfolio management or should I say mismanagement has been mitigated by ever increasing real estate values. Now that interest rates are commencing a reversal, cracks in the fabric of private lending and in particular MIC management and oversight are about to come to light. It should fall within the duty and practices of FSRA and FSCO to ensure that borrower and smaller MIC investor / consumers are protected under proposed new licensing. Its time that oversight and education requirements be extended to MIC managers and employees. MIC employees that have direct contact with investors and borrowers and/or make decisions related to policies and procedures of the MIC should be licensed or be required to at minimum take the same education and licensing prerequisites as level 2 mortgage brokers and agents. Consumers would be best served by addressing these issues before the cracks become sink holes. To continue to allow MICs exemption of these minimum requirements is risky business.

Cyber threat and terror: is another current threat but overlooked major component of the mortgage industry. Mortgage brokers and lenders manage huge amounts of consumer personal information from credit reports and financial relationship information as well as personal financial details including employment and net worth detail. Mortgage brokers and administrators need to learn how to assess the elements of a cyber breach and determine a response plan and compare outcomes. This cannot be left to any other agency removed from the regulation management of the mortgage business to best protect consumers from a growing and present danger if not addressed proactively.

Open and Necessary Communication between the OSC, FSRA and FSCO: Good housekeeping starts at home. In order to avoid another Fortress like black swan event, banned or sanctioned OSC regulated persons or entities need to be disclosed and openly shared among regulators. There can be no equivalency for licensing and no room to participate in the mortgage industry. In the Fortress fiasco, the OSC should have warned FSCO that their settlement with the future principals of Fortress, although banning all trading, management and principal participation of public companies, specifically exempted mortgage business activities, which they went on to exploit without notice to mortgage sector regulators. This should never have happened resulting in regulators deflecting blame to the industry and creating legislation and largely unnecessary additional red tape. Instead of recognizing the differences between true mortgage brokerage and lending vs sales of real estate equity participating investments registered and disguised as mortgage investments, regulators created NQSMI’s, and added layers of paperwork largely duplicating the paperwork already required and proven adequate except where a few bad actors who abused the system. The fallout cost taxpayers millions of dollars with the replacement and elimination of FSCO with FSRA and making many private commercial mortgage investments a security falling under OSC regulation and questionable securities based oversight.
Secteur du courtage hypothécaire
[2022-002] Samantha Gale - Canadian Association of Private Lenders
Please find attached my submission on this consultation - let me know if there is any opportunity for further discussion (604-365-5805) - thank you, Samantha
Secteur du courtage hypothécaire
[2022-002] J.P. Boutros - Mortgage Professionals Canada
Please see the attached, addressed to both the Ministry of Finance and to FSRA. Thank you.
Secteur du courtage hypothécaire
[2022-002] Scott Coates - KingSett Mortgage Corporation
Please see KingSett Mortgage Corporation's feedback and commentary attached regarding the proposed new licensing requirements guidance for mortgage agents and brokers (ID 2022-002).

Thank you for your consideration.
Secteur du courtage hypothécaire
[2022-002] David Mandel - First Source Mortgage Corporation
Agreed there should be graduated licensing applied to the industry as it relates to the sophistication of a transaction and not simply a base knowledge approach to this. For example of my 30 plus years in the industry most of which has been concentrated in private lending, operating a fund under the oversight of FSCO, FSRA, and the OSC, in both residential and commercial private lending, there should be equivalency given for such experience. In fact I suggest that you call upon the industry and veterans like myself to assist and consult more closely in these matters. I can see that who ever put this guidance description together has limited working knowledge of private lending. In Ontario we rarely ever go the route of "Foreclosure" but rather use Power of Sale or Receivership to deal with defaulted property. No one with experience would have used "Foreclosure" in a guidance document to the industry.

Additionally, equivalency for licensing besides being specifically experienced based needs to be limited to only those that have asset based lending experience in either public or private markets in order to ensure that suitability and KYC information if being properly collected and proper advice and qualification of borrowers and investors is being met at the highest professional levels. A non real estate practicing lawyer, or a bank financial advisor is not necessarily prepared to deal in private mortgage lending or brokerage based on past experience. Only a mortgage broker or agent with several years of experience in private lending and advising private lenders and underwriting private mortgages should be granted equivalency at least for residential private lending. When it comes to commercial mortgages or NQSMI's, I suggest that there be an even greater reliance on proven experience for equivalency assessment.

I also agree that there should be grandfathering of licenses based on proven experience. For example, if a mortgage broker has 10 or more years of private lending experience (easily confirmed by reviewing the firms E & O insurance policy pricing), and focuses in that space subject to regular reporting to FSRA and or the OSC or both private lending licensing should be grandfathered. There are many private lending companies that are registered as mortgage brokerages but only where a lenders hat, funding mortgage broker/agent originated mortgages and raising funds, funding and managing/administering those mortgage investments on behalf of investors. The teams that work in these organizations and those holding broker and agents licenses should be grandfathered licensing but should be subject to continuing education requirements.

I really hope FSRA is listening. I will know for sure when I see that default discussion replaces Foreclosure with Power of Sale and/or Receivership.
Secteur du courtage hypothécaire
[2022-002] Frank Van Bodegom - Verico The Mortgage Station
Even in the previous comments it is evident that our industry recognizes that changes are needed in the education and training of agents and brokers. I agree that private lending is widely misunderstood and consumers may be disadvantaged by using a broker/agent that is not "fluent" in private mortgages, but having said that, I think we can agree that "private lending" is necessary, growing and here to stay.

Adding specific education for this area is great, but I do not like, nor do I think it good, to divide licences.
A broker should be able to service all the needs of a client ... separating licences is going backwards.
As brokers we need to fully understand how to guide our clients through these financial decisions, and if that requires private financing, the broker needs to know what the client needs to do to get back to a bank/A lender.
There are many brokers that only do private files exclusively but do not understand the ever changing bank/A lending guidelines ... how can they properly assist the consumer? Similarly, and probably a larger group, only service "A" clients, and reject those who do not fit into their process, leaving consumers with no hope or guidance.... how is that helping the consumer?
In addition, agents starting their career most often deal with consumers in challenging situations that call for alternative, MIC or private financing to establish themselves in order to win the confidence of professional referral sources.

I believe that the education component is necessary, but the education and training process should have agents move fully through until they have a broker status over a 2-3 yr period. Staying long term at a lower education/agent licence level should not be an option. We are brokers, consumers see us as brokers and do not know the differences in the licence levels.
If you want to separate anything, having a separate training for those looking to be principal brokers, which would make the most sense.

Just some of my thoughts...
Secteur du courtage hypothécaire
[2022-002] Angela Jenkins - Select Mortgage Corporation
I think the new licencing proposals are a great start and for sure a step in the right direction. I would like to see further proposals to licencing as a whole, which would entail new agents only being able to trade in Prime deals until a certain level of experience has been reached, then the same for alternative lending, then eventually move on to the private world. It's way to easy right now for new, inexperienced agents to put a borrower into an expensive private mortgage without first exploring the options available to that borrower simply due to inexperience.
Secteur du courtage hypothécaire
[2022-002] Julie Sheremeto - The Mortgage Advisors
I am onboard with regulations that help keep our industry in good standing however there are two major concerns here. The first is that private lending covers a WIDE spectrum of transactions and is already heavily regulated within the brokering industry. Adding additional licensing requirements is going to muddy already very challenging water with hard-to-understand-and-follow regulations. I am disappointed also that ALL entities such as a banks and their representatives CONTINUE to be exempt from requiring licensing while we continue to be held to task more frequently. They are doing the SAME JOB for consumers and should be held to the same standard. Period.
Secteur du courtage hypothécaire
[2022-002] kuldip sharma - expert financial corp
Yes, I support more education on private mortgage and funding. Also, action is required to stop private funding by the private non-license agents. This is possible to ask lawyer not to register mortgage if agents are not licensed
Secteur du courtage hypothécaire
[2022-002] Scarlett
This is again another FSRA money grab on our industry for no legitimate reason. You have already hiked up our licensing fees and make us renew our licenses twice as often as we did with FSCO, and make us take a re-licensing course every 2 years, as if for some reason, we forget how to do our job every other year. Now, you want to add another course for us to pay for, in order to do a job that we've been doing for years.
Are private mortgages more complex than traditional mortgages? Absolutely NOT. In fact, they are often more simple and straightforward. Are the less transparent? No, since we complete the same required documentation and borrower disclosure to all of our clients.
The rise in the private mortgage industry has to do with regulations for obtaining a regular mortgage. Your solution does absolutely nothing positive for the industry or the professionals who work within it. FSRA keeps coming up with new ways to hassle brokers and agents that in the end, do nothing to address the real problems in the financing industry. Over regulating brokers and doing nothing at the institutional level solves nothing.
Enough with the half-baked solutions and stop exploiting mortgage professionals for financial gain. The insinuation that we "need more education" on this is just insulting and quite frankly, irritating. Bring back FSCO, because FSRA has done nothing effective but drive up the cost of our businesses while providing nothing of value to professionals or clients in return.
Secteur du courtage hypothécaire
[2022-002] Aman Marok

I am brand new to the industry, but even myself and many of my other classmates are still wondering, why not simply just really revamp and update the licensing requirements. Its no secret in the industry that the course is very outdated. The reason i mention this, is it is easy to make a new license for private mortgages, but if the initial course was much more rigorous and functional, it may alleviate alot of the issues.


Secteur du courtage hypothécaire
[2022-002] Razi Khan - Pegasus Mortgage Lending

It is my professional opinion that having multiple licensing categories does not help resolve problems surrounding the private lending space. Consumers are generally not aware of educational and experience requirements a mortgage agent/broker is suppose to hold for any particular activities. This allows for many players to conduct themselves not in accordance to the MBLAA. The onus to monitor activities of a Mortgage Agent is placed on the brokerage and principle. However even with providing adequate supervision, training, support and establishing a tough compliance regiment many mortgage agents act beyond their scope.

Establishing multiple licensing categories will NOT practically prevent Mortgage Agents 1, from actively soliciting and advising consumers on private mortgages. Supervisory agents/brokers will only place their names on the loan application and papers, while the level 1 agents do the ground work and offer advice which is not part of their scope, educational knowledge or experience. This measure creates a regulatory framework to try and safeguard consumers but in practice it falls short.

I believe that the educational requirements for private mortgages should be required of ALL mortgage agents as part of the initial licensing Mortgage Agents/Brokers. Whether this is divided into two separate courses or added as a section in the licensing course, that would be at the regulators discretion. This ensures that every single individual that is getting a mortgage agent license has the necessary educational requirements met from day 1 to ensure that they are providing proper advice to consumers as they relate to private lending.

Razi Khan
Broker, CEO
Peagsus Mortgage Lending Center

Secteur du courtage hypothécaire
[2022-002] Teresa Di Franco - Mortgage Architects Expert
I think this is a great idea but need to consider grandfathering individuals on an exception basis.
For example... A principal broker that has been in the role for over 5 years, operates and manages a brokerage , has an Admin license and Administrates their own MIC. Such individual should be reviewed and consider to be grandfathered. An application to be completed and supported by a reputable industry representative. Annual relicensing is a given for all licensing levels.

Secteur du courtage hypothécaire
[2022-002] Marcus Rener Beltran - Mortgage Architects Experts
I believe that there should be grandfathering/exemption rules to those who are already licensed as m0rtgage brokers and agents for at least 5 years AND who have not been penalized under the MLBAA, other provincial and federal regulators and under the Criminal Code. Then an annual CE attestation would be put in place to ensure knowledge of current regulations. As the current proposal stands, this would be another case of over-regulation and unnecessary burden to stakeholders/industry participants. We can look back in the past and we could conclude that creation of additional licences would not do any good, period.
Secteur du courtage hypothécaire
[2022-002] Sean Donohue - The Mortgage Professionals

I have read and agree 100% on the need for more education and training on "private" lending. I have been in this business for over 25 years and a good portion of my business over the years has been in private. My only concern with this process is dividing our business into groups!! I think if you are a Broker / Agent you should do all parts of the business not just some. If you only can do some parts it makes our industry seem less professional of "full service". A client calls in and is not really sure on exact needs the agent does the call and then turns to be a private....oh sorry I don't have that licence I can't help you! Do the update, improve the it needed but do it for all broker and agents.

My two cents!!
Date posted Secteur Question et réponse
Secteur du courtage hypothécaire

Question: Is it true that those with broker licenses will be grandfathered in and wont require an additional license?

FSRA réponse:

Under the proposed licensing requirements, there is no grandparenting/exemption for those who are already licensed as mortgage brokers. Individuals currently licensed as mortgage brokers must successfully complete a FSRA-accredited Private Mortgages Course or Challenge Exam by March 31, 2024, to maintain their licence under the new regime. The Challenge Exam option is only offered to mortgage brokers who have five or more years of continuous licensing experience. See Table 2 in the guidance for more information on the transition requirements.