Mortgage Broker

Winter 2019

Mortgage Broker is the magazine of the Canadian Mortgage Brokers Association and showcases the multi-billion dollar mortgage-broking industry to all levels of government, associated organizations and other interested individuals.

Issue link: http://digital.canadawide.com/i/1078044

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for the security property; n a statement setting out the details concerning the first mortgage; and n a sheet outlining the terms of the proposed mortgage investment (including that the first mortgage had a balance owing of $543,000). e lender approved the mortgage and advanced $108,000, secured by a second mortgage. A year later the mortgage was, at the borrower's request, increased to $158,000. e further $50,000 was to clear off an onerous third mortgage that had been registered to pay off the borrower's stock debt. THE ISSUE A big part of a broker's job is to gather mortgage loan application information about borrowers (such as employee information, credit reports and appraisals) and present it to lenders for approval and funding. What level of care does a broker have to put into making sure the presented information and any advice provided as to the wisdom of funding the transaction is accurate? What liability does the broker have when a funded transaction later appears to have been an unwise deal for the lender? What might a broker do to limit the possibility of any such liability? e November 19, 2018 decision in Royce Holdings Inc. v. Jupe, 2018 BCSC 2025 goes some distance in filling the void of informa- tion available to answer these questions. Of course, you would want to obtain legal advice to cover specific instances. WHAT HAPPENED? A broker provided a loan application package to a lender, including: n a mortgage application (including a statement of assets and liabilities, as well as a credit report, regarding the borrower); n an appraisal indicating a value of $810,200 42 | winter 2019 cmba-achc.ca CMB MAGAZINE REQUIRED STANDARD OF CARE Sharing application information fully and honestly can avoid sharing in liability BY RAY BASI, L.L.B., STAFF, EDUCATION AND POLICY REVIEW

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