FSRA is sending a reminder to mortgage agents and brokers in Ontario about the importance of renewing your license.

Licensing helps ensure mortgage professionals are well-equipped to offer consumers suitable products. In addition, licensing requirements such as mandatory errors and omissions insurance help ensure that consumers have confidence that recourse options are available if something should go wrong.

For reference, a mortgage agent or broker licence connected to a brokerage licence is required for arranging mortgages, renewing mortgages, refinancing with consumers’ current lenders and switching lenders.

Read on to learn more about key definitions which should help establish a common understanding around licensing.

MBLAA

The Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA), sub-sections 2(2) and 2(3), along with section 4 state that, unless an exemption applies[1], a licence is required to conduct certain activities:

  • When an individual or entity deals in mortgages in Ontario[2], a mortgage brokerage licence is required.
  • When an individual deals in mortgages in Ontario for direct or indirect remuneration[3], they must hold a broker or agent licence[4] and act on behalf of a licensed brokerage.
  • When an individual or entity carries on business as a mortgage lender in Ontario, a mortgage brokerage licence is required[5].

Definitions

What do ‘dealing in mortgages’ and ‘lending’ mean under MBLAA?

Dealing in mortgages includes[6]:

  • Soliciting[7] another person or entity to borrow money on the security of real property[8]
  • Soliciting another person or entity to lend money on the security of real property[9]
  • Providing information about a prospective borrower to a prospective mortgage lender (whether or not MBLAA governs the lender)[10]
  • Assessing a prospective borrower on behalf of a prospective mortgage lender (whether or not MBLAA governs the lender)[11]
  • Negotiating or arranging a mortgage on behalf of another person or entity, or attempting to do so[12]
  • Engaging in such other activities as may be prescribed[13]

If an individual or entity does any of the above activities (or holds themselves out as doing such), they are dealing in mortgages and require an appropriate licence[14].

Lending is defined as the act of lending money in Ontario on the security of real property. A mortgage lender is a person or entity who lends money on the security of real property[15].

If an individual or entity carries on business as a mortgage lender in Ontario by lending money on the security of real property (or holds themselves out as doing so), they are a mortgage lender and require a valid mortgage brokerage licence[16].

These activities can occur at the beginning of a new mortgage term and also any time the contract terms change. Arranging new mortgages, renewing mortgages, refinances and switching lenders involves activities included in the MBLAA definitions of dealing in mortgages and lending. As such, facilitating these transactions requires the involvement of a licenced party to fulfill the consumer protection obligations under the MBLAA[17].


[1] Details on exemptions can be found in O. Reg. 407/07: Exemptions from the Requirements to be Licenced
[2] MBLAA, sub-section 2(2), Prohibition re carrying on business
[3] As an employee or otherwise (e.g., independent contractor)
[4] MBLAA, sub-section 2(3), Prohibition re dealing
[5] MBLAA, sub-section 4(2), Prohibition re carrying on business
[6] MBLAA, sub-section 2(1), Dealing in mortgages
[7] Dictionary definitions of soliciting include (but are not limited to): asking for or trying to obtain something for someone, offering your or someone else’s services, asking someone for something, trying to get something or persuading someone to do something, etc.
[8] MBLAA, sub-section 2(1), paragraph 1
[9] Ibid
[10] Ibid., paragraph 2
[11] Ibid., paragraph 3
[12] Ibid., paragraph 4
[13] Ibid., paragraph 5
[14] Unless an exemption applies, see O. Reg. 407/07: Exemptions from the Requirement to be Licensed
[15] MBLAA, sub-section 4(1), Mortgage lending
[16] Unless an exemption applies, see O. Reg. 407/07: Exemptions from the Requirement to be Licensed
[17] Ibid