40 Questions
What is required of a mortgage administrator regarding public relations and public relations materials?
They must establish a complaints process
What is the duty of a mortgage administrator in relation to the creation of a mortgage administration agreement?
Create a mortgage administration agreement that clearly outlines the terms of service and fees associated with the mortgage administration
What does the duty to have insurance, as per O. Reg. 189/08 s27, apply to?
Having errors and omissions (E&O) insurance
What is the responsibility of a mortgage administrator regarding deemed trust funds?
Prepare and submit an audited financial statement for the authorized trust account
What is the duty of a mortgage administrator regarding the establishment of a complaints process?
Create a process to handle complaints about any administration activities
What should be included in the policies and procedures manual of a mortgage administrator?
All of the above
What is the purpose of the mortgage administrator obtaining written acknowledgements from lenders/investors?
To confirm that the mortgage administrator made the required disclosures about potential conflicts of interest
What are trust funds, as defined in the regulations?
Funds held on behalf of another party and not belonging to the brokerage
What is the timeline for depositing all payments, including mortgage interest and principal payments received from a borrower, into the trust account?
Within one business day of receiving the funds
What is the consequence of misappropriation of trust funds?
Potential imprisonment
What is required if a mortgage administrator identifies a shortfall in the trust account?
Contact FSRA and provide audited financial statements for the year-end
What does a mortgage administration agreement formalize?
The expectations and duties of each party involved
What type of entities can FSRA issue a mortgage administrator's license to?
To corporations, partnerships, or sole proprietorships
In what name can a mortgage administrator's license be issued?
Either in the legal name or in one other name that is registered to the corporation, partnership, or sole proprietorship
What tasks is a mortgage administrator responsible for?
Processing renewals, following up on late payments, processing payments, producing mortgage statements, communicating with lenders and borrowers
Under which act are there specific regulations that a mortgage administrator must adhere to?
Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA)
What is the responsibility of a mortgage administrator according to O.Reg.411.07?
Administering the loan from funding of the mortgage loan until it is paid off
What does a mortgage administrator need to ensure while administering a loan?
Compliance with regulatory requirements and ensuring customer satisfaction
What must be deposited into the administrator's trust account within two days of receipt?
Mortgage payments
What is a key component of the administrator's role in relation to the lender/investor?
Monitoring and tracking mortgage payments
What is the source of revenue for administrative fees?
Borrower's mortgage payments
What is the purpose of participation by the administrator in the up-front lender fee?
To earn fees for setting up the administration
What is a common practice to reduce time depositing and clearing funds for receiving and issuing funds to investors?
Making pre-authorized debit arrangements with the borrower
What should be included in the administration agreement in relation to communication and reporting to the lender/investor?
Who pays for legal services in case of default and power of sale
What is the advantage of using power of sale for a mortgage lender?
The procedure is relatively inexpensive compared to a foreclosure
What action can the mortgage lender take if there is insufficient money from the sale to repay the amount owing on the mortgage loan?
Pursue the personal covenant for the shortfall
When can the power of sale proceedings begin?
Day 16 of the mortgage being in arrears
What happens if the property is sold for less than what the lender is owed?
The lender can obtain judgment or garnish wages
What is the responsibility of the mortgage administrator when selling the property under power of sale?
To obtain fair market value and possibly reduce the price if necessary
What action can be taken if the borrower cannot bring the mortgage payments up to date after the notice period?
The borrower must pay off the entire mortgage or vacate the property
What is an advantage of using power of sale according to the text?
The lender can recover funds more quickly compared to foreclosure
What happens after the property is sold under power of sale?
All costs and fees will be paid off, and any remaining equity will go to the borrower
What does Day 15 signify in relation to power of sale proceedings?
The day when private lenders typically take immediate action
What action can be taken if there is more equity in the property than the loan balance?
The mortgage administrator must advise any lender with a lien on the property about power of sale
What is the primary responsibility of the administrator in managing risks and issues?
Maintaining a checklist for dealing with any issues that may arise
In what situation can the mortgage lender start foreclosure proceedings?
If any covenant under the mortgage is violated
What is the advantage to the lender once a court order of foreclosure is obtained?
The mortgage lender becomes the property owner
What is a disadvantage to the lender in a foreclosure process?
Land transfer tax is payable upon registration of the final foreclosure order
What is one of the advantages of a power of sale over foreclosure for the mortgage lender?
The mortgage lender can sell the property in a timely fashion
What is the first step in completing a power of sale?
Completing a search of the title to the property
This quiz provides a list of requirements to include in the mortgage administration agreement as per 189/08, s18. It encourages brokers to compare the list with their brokerage's administration agreement to ensure compliance.
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