FSRA has found that some mortgage brokerages are conducting activities that require a mortgage administrator licence. These activities include:
- collecting payments from borrowers and remitting to lender
- taking steps to enforce payments in default
What should I do to stay compliant?
To adequately manage the expectations of the lender and investors that are planning to administer their own mortgage, brokerages, brokers and agents should clearly describe their role in the transaction; and explain the activities required from lenders/investors servicing their own loans. To clarify:
- Compliant: Lenders/investors administering their own mortgage and facing a default have at times contacted the brokerage, broker or agent with whom they have a relationship instead of their borrower. The mortgage professional can facilitate communication between lenders/investors and their borrowers. For example, brokers and agents can flag the default to borrowers and provide the parties’ contact information to each other. This can be done without enforcing the default payment nor collecting the payment.
- Not compliant: When brokerages, brokers and agents try to collect payments from borrowers, to remit the payments to lenders/investors.