Files and funds received by Wednesdays at 9pm will be scheduled to be paid out the following Wednesday.

 

 

Click on Disclosure to Borrower entry screen in Filogix

 

Cost of Borrowing 1st page

 

If there is no grace period with respect to when interest begins then please leave this box blank

 

“Where the actual interest rate may change… “- this is in respect to Variable mortgages and you would put in the details of the product. See below for appropriate descriptions

 

Terms and Conditions: These are all defaulted to” Refer to the commitment for complete details”. Please add anything that is unusual on the approval. For example: tax hold backs, cash backs for down payment, holdback of funds, bridge financing information, insured conventional mortgage, etc.

 

Nature, Amount and Timing of Optional Services: This includes life insurance, ELV, Home Warranty Plans, etc.

 

Conflict of Interest 2nd page

 

  • Conflicts of Interest -describe any conflicting relationship if it applies to your deal. For example, you’re related to the lender

 

  • Mortgage Commission – tick the box

 

  • Bonus (really means Volume Bonus) – tick the box

 

  • Other Compensation (means points, mcap bucks, etc) – tick the box

 

  • Referral – No referral Fee paid or Referral – Referral Fee paid tick the boxes if either applies to your deal. If they don’t apply then leave them blank. If you have ticked that a referral fee will be paid then you must include the name of the person or company that is receiving the referral fee

 

  • The Broker is representing Both the Lender and the Borrower … (changed from Lender)

 

  • The brokerage has placed over 50%… leave this blank as it does not apply unless the client requests the information

 

  • The brokerage has acted for 35 lenders during the previous fiscal year

 

  • RMA has not acted as a lender in the previous fiscal year

 

  • After all the information is entered then it will download onto the Disclosure Form. Please PRINT COMBINATION as this melds the 2 forms into one document.

 

  • Please have client sign and date the waiver as well as the acknowledgement on the disclosure

 

 

 

 Variable Rate Mortgages

 

Here are 2 examples of the descriptions that need to be included in on the disclosure where the mortgage is a Variable Rate Mortgage

 

 

Scenario 1 – TD, Meridian Credit Union, Your Neighbourhood Credit Union do not automatically adjust the mortgage payment as the Prime rate changes. The description should read something like this:

 

VRM, Prime -.60, compounding monthly, lender will not change the mortgage payment as Prime changes, therefore, negative amortization may occur.

 

You will need to adjust the percentage rate and compounding to match the commitment

 

 

Scenario 2 – for all other A lenders:

 

VRM, Prime -.60, compounding semi annually, lender will change the mortgage payment as Prime changes.

 

You will need to adjust the percentage rate and compounding to match the commitment

 

 

 

Step, Matrix, AIO, LOC, HELOC, and  the like

 

Complete the file as if it was a fixed mortgage using the total mortgage amount. The only difference is that in the disclosure you will enter the line of credit portion (as if you were doing a vrm)

 

The description for the vrm portion on the disclosure will read something like this:

 

STEP mortgage for 150K –  50K in a secured line, calculated monthly based on the prime rate, not amortized, interest only payments

100K in a VRM, Prime -.70% lender will change mortgage payments as Prime Rate changes

 

Matrix mortgage, 25K in a LOC, calculated monthly based on the prime rate, not amortized, interest only payments

 

AIO Mortgage, 10k in a LOC, calculated monthly based on the prime rate, not amortized, interest only payments

 

LOC and/or HELOC, 75K in a LOC and/or HELOC, calculated monthly based on the prime rate, not amortized, interest only payments

 

Equity Line Visas & Bundle Mortgages

 

Home Trust ELV’s – the line of credit portion and terms should be written in the terms and conditions section of the disclosure.

 

For example: 7k in an equity line visa at 8.99%. Payments based on 1% of the monthly balance or $10.00, whichever is greater.

 

Bundle Mortgage – Home Trust has recently re introduced the Bundle Mortgage. Since they are issuing 2 separate approvals (one for the 1st and one for the 2nd) I will require 2 separate complete files

 

 

General Rules for the disclosure form

 

Anyone looking at a disclosure should be able to understand what type of mortgage and what the different terms are if the disclosure is completed properly. Common sense should prevail in some situations regarding mortgages that are not quite straight forward. The following are guidelines only and may not cover the scope of all that’s required on a disclosure.

 

CMHC

 

  • If CMHC and sales tax charged, then remember to add the amounts to the fees section of the disclosure
  • CMHC and sales tax are NOT to be included in APR (unless it’s an insured conventional mortgage)
  • If the lender/client is paying the cmhc and tax  or if it’s an insured conventional mortgage then please make a note of this in the terms and conditions section of the disclosure

 

 

 

 

FEES SECTION – what to include

 

  • Lender fees are to be entered in the fee section of the disclosure and included in APR

 

  • Estimated legal fees and disbursements are to be listed in the fees section of the disclosure and NOT included in APR

 

  • Any cost associated with the mortgage needs to be listed in the fees section and included in APR. For example: valuation fees, appraisals, home inspections, lender fees, broker fees, title searches, etc.

 

TERMS AND CONDITIONS SECTION – what to include

 

 

  • Tax holdbacks are to be listed in the Terms and Conditions section of the disclosure

 

  • Information on bridge financing are to be listed in the Terms and Conditions section of the disclosure

 

  • Cash back amounts are to be listed in the Terms and Conditions section of the disclosure

 

  • Any funds held back at closing by the lender must be recorded in the Terms and Conditions section of the disclosure

 

  • Any penalties for breaking a mortgage can be listed in the Terms and Conditions section of the disclosure, never in the fees section

 

  • CMHC and tax charged by the lender AND paid by the lender or client

 

  • Make a note of any insured conventional deals

 

  •  ELV’s must have an appropriate description. i.e. ELV, interest only monthly payments based on 1.5% of outstanding monthly balance, no amortization

 

  • Lines of Credit must have an appropriate description. i.e. LOC, interest only monthly payments, no amortization

 

 

 

 

 

 

 

Other things you need to know

 

Form 1

 

All  Private  Investor Disclosures (FORM 1) must be received at  head office for Broker of Record’s signature before going to the Investor 2 days prior to the Investor committing to fund such mortgage. Please also include the Lender Risk Tolerance form and photo ID of the investor when sending the Form 1 to head office for signing

Failure to do this will result in no commissions payable Commissions/Broker Fees to you as an agent or broker, no exceptions will be made.

Please email them to maryannlegato@rmabroker.ca or fax them to 1-888-482-3536

 

Turn around time for a Form 1 is 48 hours

 

 

Insurance

 

Make sure the clients initial at the top of the form to waive or accept life and/or disability. Please also make sure they sign and date at the bottom of the form. Make sure to fax all accepted insurance forms and a void cheque to the insurer (MPP)

 

 

Client Suitability Form

 

Must be signed and dated by all clients on the application. If the mortgage is Variable or a product based on the Prime Rate then please also have the client circle their risk tolerance

 

 

 

 

Photo Identification

 

Mortgage brokerages must take steps to verify the identity of the borrower and lender that you do business with. Acceptable photo ID is the following:

 

1.    Driver’s license

2.    Passport

3.    Citizenship Card

 

Please note: In addition to the picture, the ID must show the client’s signature. This may mean that in some cases you will need to take multiple photocopies of the ID. FSCO indicates that a Health card (OHIP card) is NOT acceptable. At the time of your client meeting have a digital camera, or your phone available. Take pictures of the client’s ID and signatures for the greatest clarity. Please make sure to write the clients name and ID# beside the photocopies before sending the file in

Credit Bureaus

 

You must always have a signed consent form from the client BEFORE running a bureau. This is an Equifax rule and Equifax may suspend your privileges permanently if you do not comply.

 

All files must be submitted to head office by 9pm on Wednesday nights for payment the following Wednesday (assuming the finds are in as well!!)