BC Mortgage Brokers
How the British Columbian Mortgage Brokerage System Operates
A mortgage broker is an intermediary who brokers mortgage deals between a borrower (the homeowner/business) and a lender (usually the bank). Conventionally, banks and other lenders would sell off loans by themselves. However, in recent years, the role of brokers within the Canadian mortgage system has become more pronounced, to the extent that BC mortgage brokers are now the biggest vendors of mortgage loans for moneylenders.
Brokerage structure in British Columbia
In Canada, a mortgage brokerage is subject to the regulations imposed by the provincial governments. In a majority of provinces, brokerage firms are required to carry state-issued licenses. Mortgage companies in British Columbia obtain operational licenses from the FICOM (Financial Institutions Commission). There is a strict law in the state that all individuals engaged in mortgage lending, mortgage brokering, mortgage administration or mortgage trading should get official registration, except under conditions of exemption.
What do BC mortgage brokers do?
Mortgage brokers perform all the groundwork in a mortgage deal. They obtain information from their client, the borrower, and focus more on a an overall plan, not only to get the best rate but with the most flexible terms to ensure their clients are paying the least overall interest on their loan. They conduct research and collect information, both for the lender and for the borrower. They take in the mortgage applications, and obtain and complete the supporting documents on behalf of the borrower.
The BC mortgage brokers accumulate the borrower’s employment and income documentation to assess their credit history and determine their eligibility for bankrolling. A standard bank operating alone would collect the same documents.
In addition, the brokers explain the mortgage terms and workings to the borrowers so they understand the procedure. They also assess the mortgage options to identify which package would best suit the borrower.
Registering for a mortgage brokers’ license
Under the revised Mortgage Brokers Act, all persons involved in moneylending and in the purchase and sale of mortgages must operate under a license. New registrants must download and print an application forms available on the FICOM website. The application must be filled in and then sent, along with the supporting documentation and fees, to the office of the Registrar of Mortgage Broker. The Registrar is an authoritative body that investigates grievances and allegations, and regulates the body of BC mortgage brokers under the Act.
Applicants registering as sole owners or as submortgage brokers are required to complete certain programs or courses before they can qualify for a license. These courses are:
- A certificate in Urban Land Economics, or its three core programs:
- Real Property Law and Ethics,
- Foundations of Real Estate Mathematics, and
- Real Estate Finance in a Canadian Context
- Mortgage Brokerage in British Columbia, or
- A Bachelor of Commerce degree specializing in Real Estate
Upon successful completion of the selected course or the Bachelor’s degree, the applicants must submit an application within a year of obtaining the certificate. This helps to ensure that the individuals can capitalize and build on their education. Conversely, if the person has been arranging mortgages under an organisation exempted from licensing, the one-year limit can be protracted.
Applicants with prior experience in the brokerage industry are required to complete an advanced version of the program, Mortgage Brokerage in British Columbia. They can apply for the Examination Challenge Option, a platform that allows registrants to obtain study resources and to tackle the final exam without the need to submit course assignments. To apply for this program, they must submit a document summarizing their educational and work experience to the office of the Registrar. Once they receive a document of confirmation from the Registrar, they can enroll for the required course exam.
It must be kept in mind that, while the BC mortgage brokers themselves require registration, they may hire accounting or clerical staff without the need to obtain registrations for them, as long as such persons are not actively involved in organizing mortgages.
The BC mortgage brokers are bound by strict laws to ensure effective and trustworthy arrangement of mortgages for borrowers in British Columbia.