Policies and Procedures

Policies & Procedures

The following contains part of the critical Policies and Procedures required under the Mortgage Brokerage, Lenders and Administrators Act 2006 (MBLAA) for Real Mortgage Associates Inc. in order to govern how all of our Mortgage Agents and Brokers will conduct their day-to-day business.

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Policies and Procedures are required under Ontario regulation 188/08 s. 41
Our brokerage designated a principal broker who satisfies the following criteria:

• The individual is a mortgage broker who is authorized by the brokerage to deal or trade in mortgage on its behalf.
• The individual is a Director or Officer of the corporation

The brokerage will notify FSCO within 5 days if there is a change of principal broker (O. Reg. 193/08, s. 11)
Every broker and agents will notify FSCO and Real Mortgage Associates of any changes to their personal information (email, home address, phone number, fax number)
The brokerage will adequately supervise its brokers, agents and branch offices (O. Reg. 188/08, s. 40)

REAL MORTGAGE ASSOCIATES INC. will appoint a number of licensed brokers to Act as regional supervisors. These regional supervisors will be responsible for the following:

• The regional supervisor must be available as required to assist the agents under his supervision
• The regional supervisor will Act as a mentor as well as a supervisor to the agents under his control
• The broker will review and sign Investor Disclosure Forms on behalf of the agents prior to them being forwarded to the investor for review
• The regional supervisor will physically meet with all agents under his control at least once a quarter
• Attendance is mandatory for these meetings.

While the chief Compliance Officer is ultimately responsible for the documentation of agents’ files, the regional supervisors will randomly spot check files in progress to ensure compliance with the legislation.

Agents who hire assistants to assist with administrative functions must ensure that the assistants are not dealing in mortgages as defined in the Act. Administrative assistants are prohibited from taking applications, signing clients or directly discussing product placement with potential clients. Their role should be restricted to dealing with lenders and borrowers with respect outstanding documentation and other administrative functions. It will be the responsibility of the supervising broker to ensure that administrative assistants are not dealing in mortgages illegally.

The brokerage is not involved in any other business with another entity that may jeopardize the integrity, independence or competence of its mortgage brokerage activity (O. Reg. 188/08, s.56)

The brokerage will file electronic an Annual Information Return by no later than March 31st of every year.

Real Mortgage Associate Inc. is a corporation:

• The corporation was incorporated in Canada
• The corporation has a physical mailing address in Ontario (O. Reg. 408/07 s. 1(1)): 578 Upper James Street, Hamilton, Ontario L9C 2Y6
• The brokerage will notify FSCO of any changes in the location (place of business) within 5 days.
• In the event of any office location opening or closing, the brokerage will notify FSCO within 5 days (O. Reg. 193/08 s 8 and 9)
• The brokerage will notify FSCO within 5 days if there are any changes to their directors or officers. (O. Reg. 193/08 s. 10)
• The brokerage will report to FSCO any email, phone number or fax number changes within 5 days.

Errors & Omissions

The corporation has Errors and Omissions (E&O) from an insurer who is approved by the Superintendent of FSCO.

This E&O must have a minimum of $500,000 in respect of any one occurrence involving the corporation or any broker or agent authorized to deal or trade in mortgages on its behalf and $1 million in respect of all occurrences during a 365 day period involving the corporation or any broker or agent.

The brokerage will always carry E&O insurance with the required coverage while dealing and trading in mortgages. (O. Reg. 188/08 s.42)

Proof of insurance will be available to FSCO upon request.

Advertising Policy

The Standards of Practice for Mortgage Brokerages (Ontario Regulation 188/08 under the MBLAA, 2006) contains detailed advertising and marketing regulations. These rules are not optional – they are mandatory, and FSCO has made it quite clear there will be financial penalties for those individuals and Brokerages that do not comply.

Please note that these rules apply to anything and everything you use to market to the general public, referral sources, etc. in any medium, save any for Promotional Items as defined in the next section.

Definition of Promotional Materials

Promotional Materials are defined as those items, which you would distribute to peers or referral sources within the Mortgage, Real Estate, Legal, Appraisal, Inspection, or Financial Services industries in order to promote your business in the hopes of gaining referrals. In addition, Promotional Materials are also defined as those items, which you use to promote Real Mortgage Associates Inc.’s name, brand, and identity, along with your own identity. This includes (but is not limited to) items like golf balls or golf towels, shirts, pens, coffee mugs, awards, etc.

Each Promotional Item will be evaluated on a case-by-case basis to determine whether full Brokerage information needs to be displayed. In any case, if anything has the individual Agent or Broker name on it, it is the policy of Real Mortgage Associates Inc. that the proper title as dictated by FSCO will follow your name (i.e. Mortgage Agent or Mortgage Broker).

Please submit all Promotional Material ideas / proofs to the Principal Broker for approval before purchasing and distributing so they can be approved as Promotional Materials as per this definition.

Use of Authorized Names

This is one area that causes some confusion among Mortgage Brokers/Agents. Your Authorized Name is the name under which you are licensed by FSCO. To verify yourAuthorized Name, visit the FSCO Website at www.fsco.gov.on.ca and use the Consumer search engine to search for yourself. This will show you your Authorized Name.

You must conduct your business under this name, and this name only (O. Reg. 187/08 s.8). You must use this name on each and every piece of advertising, public relations material, business card, web posting, or any other documents as part of the mortgage application process.

For example: If your first name is David, and you are registered on the FSCO website as “William,” then you must use your full first name when marketing yourself unless you have asked FSCO to include an alias for you under the license listing. You cannot market yourself as “Bill” or “Willie” unless the FSCO listing also has this name listed (usually in brackets, at the end of your given names).

Please note that FSCO will accept “alias” names under which you can market yourself, as long as you notify them via email or in writing. Contact FSCO via telephone at 1-800-668-0128 and speak with the Mortgage Broker Licensing section to begin this process.

If you need to change your name, or the Authorized Name, you must first contact FSCO’s licensing department and ask for the change. Once they have completed it, you must notify the Executive Administrator so that Real Mortgage Associates Inc. can ensure you are listed properly in our internal systems, on your website, and that all mortgage application and transaction forms reflect this new name.

All public relations material must be approved by the Brokerage’s Principal Broker or designate.

If you work under a team model or have setup a ‘Personal Service Corporation’ (see section 1.3.13) to facilitate bookkeeping and/or taxation you MUST have the appropriate agreements in place with your Mortgage Brokerage, in which case the name of the Personal Service Corporation may NEVER be advertised or used in any marketing material or communications with Borrowers, Lenders, or Consumers in general.

2.11.4 Use of Title (Broker/Agent)

You must always ensure that you list yourself as either a Mortgage Agent, Mortgage Broker, Agent or Broker in all marketing and promotional materials. These titles must appear immediately following or below your name. You may use descriptive phrase such as “Specialist in Retail and Commercial Mortgages” or “A Highly-Trained Mortgage Expert” in addition to your legal title, but these phrases have to be in addition to your title (O. Reg. 188/08 s.6 (4)).

2.11.5 False, Misleading or Deceptive Information

Any advertising or marketing materials you use must not contain any misleading or deceptive information (O. Reg. 188/08 s.7).

Misleading representations may be the result of:
· Negligence
· Incompetence
· Intentional misrepresentation
· Improper use of disclaimers
· Improper reliance on industry terms · Incomplete comparative ads
· Implied endorsements
· Improper use of teasers
· Use of unsubstantiated exaggeration
· Lack of timely reviews of advertisement

2.11.6 Examples of False or Misleading Advertisements

• Providing sample monthly repayment amounts for mortgage loans requiring no repayment of principal, without properly identifying that the payments shown represent only the interest portion;
• Advertising payment amounts for mortgage loans with unusually long amortization periods that do not specify the amortization period;
• Advertisements which contain repayment figures but do not contain an indication of the amortization period used to determine the repayment figure;
• Advertisements for interest-only mortgages that do not specify that the repayments do not include any principal amounts.

While in some instances the term “for illustration purposes” may be included with advertisements such as the above, it may or may not be sufficient to ensure that the ad is not misleading. The best practice is ABC: Always Be Clear.

2.11.7 Specific Rules for Specific Mortgage Types

There are also specific rules for advertising particular mortgages:

Fixed Amounts – Advertisements for a mortgage for a fixed amount that state the interest rate, or the amount of any prepayment, or of any charge other than interest, must also include the Annual Percentage Rate (APR) and the term of the mortgage; and the APR must be displayed in a manner consistent with the remainder of the ad. If the APR of the terms of the mortgage are not the same for all mortgages to which the advertisement relates, the disclosure must be based on an example of a mortgage that fairly depicts all those mortgages and is identified as a representative sample of them

(O. Reg. 191/08 s.18).

Mortgages Securing Lines of Credit – Advertisements for mortgages that secure lines of credit that state the annual interest rate, or the amount of any payment, or of any charge other than interest, must also include the annual rate of interest on the date of the advertisement. They must also include any initial or periodic charges, other than interest, and this information must be displayed as prominently as the other information in the ad (O. Reg. 191/08 s.19).

Interest-Free Periods – If an advertisement states or implies that a period of the mortgage is free of any interest charges, the ad must indicate whether interest accrues during the period and is payable after the period (O. Reg. 191/08 s.20). If interest does not accrue during a period, the ad must clearly state:

• That there is an interest-free period or grace period;
• The conditions that apply to qualify for the interest free period;
• The APR, or the annual interest rate, if the conditions are not met.

2.11.8 Brokerage Approval of Advertising

All agents and brokers new to the organization must have their advertising approved by the Principal Broker or their designate before publication or other use to ensure compliance with all rules and regulations.. The principal broker may allow tenured brokers who have demonstrated their knowledge of compliance in advertising to publish advertising without prior approval from the Principal Broker.

Brokers and agents are permitted to maintain personal websites. The URL for the website may belong to the broker or agent and the content on the site shall refer to Real Mortgage Associates Inc. The homepage must refer to Real Mortgage Associates Inc. and show the license number, and logo of the company. Other pages referencing the agent or broker must indicate that the agent or broker is a representative of Real Mortgage Associates Inc., indicating the licensing designation. Within the ‘Contact Us’ or ‘About US’ section of the website, the head office address must be listed and identified as “Head Office” or “Corporate Office”. We have established “approved suppliers” that provide content rich websites, for your convenience.