16 | spring 2018 cmba-achc.ca CmB magazIne
Brokering a
Second Mortgage
for a Borrower
simple steps to protect
yourself from civil and regulatory
consequences
By rAy BAsi, ll.B., stAff, eDucAtion AnD Policy review
ThE CliENT'S REquEST
1
A borrower asks you to arrange a second
mortgage. is is a common request made of
mortgage brokers. Each such request raises
significant issues for the broker regarding
how to best serve the client while remaining
compliant with regulations and avoiding civil
liability. We will alert you to some of the issues
that arise. is is not meant to be legal advice.
You should consider obtaining legal advice to
cover specific situations and/or concerns.
A broker may conclude that addressing
the cautions expressed in this article would
be impractical, disruptive or needless and
may result in clients not proceeding with
some transactions. e benefits, detriments
and risks of following or not following the
suggestions provided here is something each
broker will have to assess. Regardless of the
decision the broker makes, it is always better
that the decision have been made with proper
consideration of significant (and to some
degree, unavoidable) factors.
DEfaulT TRiggERED uNDER
ThE fiRST
While you are unlikely at the time of the
client's initial request to have seen the first
mortgage, you know that almost all mortgages
contain a term to the effect that registering
