Mortgage broker모기지 브로커 (모기지 에이전트)

What is it?

A mortgage broker finds out where, and on what terms, you can get a mortgage (the loan to buy a home) and connects you with the lender. In Ontario, anyone who does this work needs a licence from FSRA (the Financial Services Regulatory Authority of Ontario). The law behind it is the Mortgage Brokerages, Lenders and Administrators Act, 2006, usually shortened to MBLAA.

FSRA describes a mortgage broker or agent as an “intermediary between you and the lender”. The broker does not lend the money. They compare mortgages from many sources, such as banks, credit unions and private lenders, and help you apply.

Broker, agent, brokerage: who is who?

The law splits the roles. Individuals work under a broker or agent licence, and they must belong to a licensed company (a brokerage).

Only licensed people may use the titles “mortgage broker” and “mortgage agent” (MBLAA, section 11). A licence is issued for a one-year term. Many people called “mortgage brokers” are actually agents; on this page we use “broker” for both.

How is a broker different from a bank mortgage specialist?

FSRA notes that “some lenders only work through licensed brokerages, brokers or agents.” On the other hand, if you go straight to a bank you only see that bank’s products. The safest approach is to check both and compare.

Who pays the broker?

Usually, when the mortgage is funded, the lender pays the brokerage, and the brokerage shares that with its broker or agent. That is why, for an ordinary bank mortgage arranged through a broker, it is common that the borrower pays no separate fee. “Common” is not a legal rule, though, so confirm your own case in writing.

The law makes the money trail visible. The brokerage must tell you in writing whether it receives a fee from anyone else (such as the lender), from whom, and how it is calculated, and get your written acknowledgement (O. Reg. 188/08, section 21). The same applies if the brokerage pays a fee to someone else (section 22).

An individual broker or agent may not take a fee directly from anyone but their own brokerage (O. Reg. 187/08, section 4). If someone asks you to send money to a personal account, that alone is a red flag.

If the mortgage is $400,000 or less, the brokerage may not ask for or accept any advance fee or deposit before the work is done (188/08, section 37). For loans above $400,000, FSRA says any up-front fee must not be paid in cash and must go to the brokerage, not to the agent or broker. With private mortgages or a weak credit file there may be a broker fee charged to you, so get the amount in writing.

What the law requires of a broker

• Suitability: the mortgage they present must be suitable for your needs and circumstances (188/08, section 24).
• Risks in writing: they must disclose the material risks of each mortgage in writing and get your written acknowledgement (section 25). FSRA also says you have the right to this disclosure “in writing and in plain language” before you sign.
• Timing: every required disclosure must come at the earliest opportunity and no later than two business days before you sign the mortgage agreement (section 35). You can agree in writing to a shorter time, but be careful if someone is rushing you.
• Whose side: the brokerage must tell you in writing whether it represents the lender, you, or both (section 18), and how many lenders it worked with last fiscal year and whether it was itself a lender (section 19).
• No tied selling: they cannot force you to buy another product as a condition of the mortgage (section 15).
• No fraud: they may not help with or ignore false information in an application and must warn the lender if they doubt it (sections 14 and 14.2). Avoid any broker who offers to “adjust” your income or documents.

Step by step

1. Check the licence: search the FSRA public registry by name or licence number. On request, a broker must give you their licence name, licence number, and the name and licence number of their brokerage (187/08, section 10).
2. Consultation and documents: you provide income, down payment, debt and credit information. Read the whole application, and never sign a form with blanks (FSRA guidance).
3. Pre-approval: you learn how much you can borrow. It often comes with a rate hold for a set time, but terms vary by lender. A pre-approval is not the final approval.
4. Full approval after your offer: once you have a home, the broker sends the file to the lender and you receive the lender’s commitment letter. Read the conditions, rate, fees and prepayment penalty clauses.
5. Receive the written disclosures: fee disclosure, risk disclosure and the brokerage’s role, at least two business days before you sign, and acknowledge them.
6. Lawyer and closing: you usually sign the mortgage documents with your lawyer before closing, and the funds typically arrive in the lawyer’s trust account on closing day.

How do I check a licence?

On the FSRA public registry (mbsweblist.fsco.gov.on.ca) choose the “Agents or Broker” or “Mortgage Brokerage” tab and search by licence number, last name or city. The registry lists brokerages, administrators, brokers and Level 1 and Level 2 agents. Bank and credit union employees are exempt from licensing, so they do not appear.

Advertising and business cards must clearly show the licensee name, the agent level (Level 1 or 2), and the brokerage’s name and licence number (187/08, section 8). If that is missing, ask. FSRA states that acting as a mortgage agent or broker without a licence is an offence under the MBLAA that can be prosecuted.

What to watch out for

• If a private mortgage is recommended, ask why. FSRA says a private mortgage is “typically used as a temporary option for one or two years”, can carry higher rates and fees, and that you should ask for a realistic exit strategy back to a regular mortgage.
• Applying for a mortgage on someone else’s behalf (being a “straw borrower”) is illegal, and you become responsible for the loan. Say no even if you are offered money.
• FSRA handles licensing and rule-breaking, but it cannot recover your money or settle a contract dispute. If something goes wrong, talk to a lawyer, and you can also file a complaint with FSRA.
• Problems with a big bank go to the federal regulators (OSFI, FCAC), not FSRA.
• A broker helps with the loan; the real estate transaction itself is handled by a RECO-registered real estate agent. I am a real estate agent, not a mortgage broker. If you need one I can refer a licensed broker, and I will tell you in advance if there is any fee relationship.