What is a mortgage broker?
A mortgage broker is a practicing professional who assesses a borrower’s financial goals with respect to real estate financing and, after detailed analysis, provides solutions to meet those goals by acting as an intermediary with the appropriate lending source.
Mortgage brokers have two clients: the borrower (the individual receiving the mortgage) and the mortgage lender (the provider of the mortgage). In order to maintain a healthy market, it is imperative that the broker “marry” the borrower to the lender best suited for both.
In Ontario, the legal distinction between a mortgage broker and a mortgage agent is determined by licensing. Until July 2008, only a mortgage broker had to be licensed in Ontario while mortgage agents were registered by their broker with the Financial Services Commission of Ontario. As a matter of interest, the term mortgage agent did not even exist in Ontario legislation until the Mortgage Brokers Act was replaced by the Mortgage Brokerages, lenders and Administrators Act, 2006 (2006 makes up part of the title and is not when it was enacted).
Mortgage brokering in Ontario is regulated by the Financial Services Commission of Ontario (FSCO) and requires a license. To obtain a license you must first pass an accredited course. The Real Estate and Mortgage Institute of Canada Inc. (REMIC) is accredited by FSCO to provide the course. For more information please visit us at www.remic.ca/getlicensed or call us at 877-447-3642.
As of July 2008, under the Mortgage Brokerages, lenders and Administrators Act, 2006, there are three distinct licensing categories with regards to brokering (there is also a mortgage administrator’s license, but that doesn’t affect brokering activities): licensed mortgage brokerage, licensed mortgage broker and licensed mortgage agent. This legislation takes into account that the industry has changed from the “Mom and Pop” type brokerage where a mortgage broker was typically an individual, to the era of the “Super Broker” where brokerages typically employ from several to several hundred mortgage agents.
