Mortgage Brokerage Licensing Requirements
A mortgage brokerage is a corporation (who was incorporated or continued pursuant to the laws of any jurisdiction in Canada), partnership (formed in Canada) or sole proprietorship (resident of Canada) that:
- solicits another person to obtain a mortgage loan or to make an investment in a mortgage, but only if the soliciting is done on behalf of another person
- negotiates or arranges a mortgage loan or an investment in a mortgage on behalf of another person
- provides advice to a person with respect to the appropriateness of:
- obtaining a particular mortgage loan
- making a particular investment in a mortgage
To apply for licensing as a brokerage, the brokerage must:
- complete the online application process
- provide details regarding the corporate status of the brokerage, including extra-provincial registration
- provide an address for legal service in New Brunswick
- designate a Principal Broker (a director or officer, a partner, or a sole proprietor)
- remit the application fee
- meet the suitability requirements of compliance and record keeping as set out in MB-001
- have a valid registration under the Cost of Credit Disclosure and Payday Loans Act with FCNB
- provide any required supporting information in relation to the applicant’s suitability and
- provide all of the supporting materials, including:
- errors and omissions insurance that meets the criteria of Section 8 of rule MB-001 Mortgage Brokers Licensing and Ongoing Obligations and audited financial statements*
If your application is approved and you are licensed as a brokerage, you will need to comply with the requirements applicable to licence holders.
*A brokerage cannot receive any money, other than fees or other remuneration earned by the brokerage, unless the brokerage has applied for and has received an endorsement to its licence.
If the brokerage is seeking an endorsement to a brokerage licence, it must:
- make the request using the online application form
- provide trust account details
- remit the application fee
- provide audited financial statements as evidence that the brokerage meets the minimum working capital requirement
If the application is approved and an endorsement is issued, the brokerage will need to comply with the requirements applicable to brokerages that have an endorsement. Due to the significance of these requirements, brokerages must ensure that they are fully understood prior to applying for an endorsement.
Trust money, in the context of operating as a brokerage, means any money received by a brokerage from a single investor looking to purchase or fund an entire mortgage. This does not include money that is clearly made as payment to the brokerage for fees or other remuneration earned by the brokerage. It also does not include money received from an investor/lender for purposes of funding a syndicated mortgage. Entities that intend to receive money from borrowers for repayment of a mortgage are administrators and are also required be licensed in that capacity.