AroiMortgageInvestment.indd 1 16-01-18 10:40 AM
22 | winter 2016 cmba-achc.ca CMB MAGAZINE
compliancecrunch
with regards to the suitability of a mortgage product; non-disclosure
of material risks or conflicts of interest; and minimum wait times not
being met. Another area of declining compliance is the lack of proper
consumer disclosure and due diligence around product suitability.
Risk to consumers with syndicated mortgages
Brokerages that syndicate mortgages must have provisions in their
Policies & Procedures to govern areas such as disclosure, supporting
documentation and time periods for providing information to
borrowers and investors/lenders. Given the significant risks this
form of investment poses to consumers, FSCO will be conducting a
more detailed examination of the participating brokerages and
these transactions in 2016.
Great at handling complaints and records
FSCO was pleased with the level of compliance for complaint-handling
processes and the duty to have valid errors and omissions insurance.
With all the technology we use and the accompanying risks for fraud,
they also saw an improvement in the business practices regarding
the termination of a broker's/agent's access to their soware provider
when no longer authorized by the brokerage. What's more, they saw a
high level of compliance with the security of records, maintenance of
required records and records retention.
One of the surest ways to protect your business, your brokers and
your clients is to make sure your mandatory Policies & Procedures are up to
date, available to all employees, and sufficient for the nature, complexity and
size of the brokerage. You must also be aware of all the accompanying Rules
& Regulations for the Mortgage Brokerages, Lenders and Administrators
Act, 2006, including the recent changes enacted January 1, 2016.
FSCO will continue to conduct these on-site examinations to assess
the industry's level of compliance with the law. Brokerages should take
steps to ensure their internal controls are in place to avoid being in
violation of the law, facing steep fines or losing their licence entirely.
NOTE: FSCO report is available as a PDF at: www.fsco.gov.on.ca/en/
mortgage/Pages/Mortgage-Brokering-Sector-Compliance-Reviews.aspx
