Module 6 - Mortgage Administration
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Questions and Answers

What is required of a mortgage administrator regarding public relations and public relations materials?

  • They must handle payments to the lender/investor
  • They must create a policies and procedures manual
  • They must have errors and omissions (E&O) insurance
  • They must establish a complaints process (correct)

    • What is the duty of a mortgage administrator in relation to the creation of a mortgage administration agreement?

  • Establish a complaints process
  • Handle payments to the lender/investor
  • Have errors and omissions (E&O) insurance
  • Create a mortgage administration agreement that clearly outlines the terms of service and fees associated with the mortgage administration (correct)

    • What does the duty to have insurance, as per O. Reg. 189/08 s27, apply to?

  • Maintaining financial guarantee
  • Creating a policies and procedures manual
  • Handling payments to the lender/investor
  • Having errors and omissions (E&O) insurance (correct)

    • What is the responsibility of a mortgage administrator regarding deemed trust funds?

    <p>Prepare and submit an audited financial statement for the authorized trust account</p> Signup and view all the answers

    What is the duty of a mortgage administrator regarding the establishment of a complaints process?

    <p>Create a process to handle complaints about any administration activities</p> Signup and view all the answers

    What should be included in the policies and procedures manual of a mortgage administrator?

    <p>All of the above</p> Signup and view all the answers

    What is the purpose of the mortgage administrator obtaining written acknowledgements from lenders/investors?

    <p>To confirm that the mortgage administrator made the required disclosures about potential conflicts of interest</p> Signup and view all the answers

    What are trust funds, as defined in the regulations?

    <p>Funds held on behalf of another party and not belonging to the brokerage</p> Signup and view all the answers

    What is the timeline for depositing all payments, including mortgage interest and principal payments received from a borrower, into the trust account?

    <p>Within one business day of receiving the funds</p> Signup and view all the answers

    What is the consequence of misappropriation of trust funds?

    <p>Potential imprisonment</p> Signup and view all the answers

    What is required if a mortgage administrator identifies a shortfall in the trust account?

    <p>Contact FSRA and provide audited financial statements for the year-end</p> Signup and view all the answers

    What does a mortgage administration agreement formalize?

    <p>The expectations and duties of each party involved</p> Signup and view all the answers

    What type of entities can FSRA issue a mortgage administrator's license to?

    <p>To corporations, partnerships, or sole proprietorships</p> Signup and view all the answers

    In what name can a mortgage administrator's license be issued?

    <p>Either in the legal name or in one other name that is registered to the corporation, partnership, or sole proprietorship</p> Signup and view all the answers

    What tasks is a mortgage administrator responsible for?

    <p>Processing renewals, following up on late payments, processing payments, producing mortgage statements, communicating with lenders and borrowers</p> Signup and view all the answers

    Under which act are there specific regulations that a mortgage administrator must adhere to?

    <p>Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA)</p> Signup and view all the answers

    What is the responsibility of a mortgage administrator according to O.Reg.411.07?

    <p>Administering the loan from funding of the mortgage loan until it is paid off</p> Signup and view all the answers

    What does a mortgage administrator need to ensure while administering a loan?

    <p>Compliance with regulatory requirements and ensuring customer satisfaction</p> Signup and view all the answers

    What must be deposited into the administrator's trust account within two days of receipt?

    <p>Mortgage payments</p> Signup and view all the answers

    What is a key component of the administrator's role in relation to the lender/investor?

    <p>Monitoring and tracking mortgage payments</p> Signup and view all the answers

    What is the source of revenue for administrative fees?

    <p>Borrower's mortgage payments</p> Signup and view all the answers

    What is the purpose of participation by the administrator in the up-front lender fee?

    <p>To earn fees for setting up the administration</p> Signup and view all the answers

    What is a common practice to reduce time depositing and clearing funds for receiving and issuing funds to investors?

    <p>Making pre-authorized debit arrangements with the borrower</p> Signup and view all the answers

    What should be included in the administration agreement in relation to communication and reporting to the lender/investor?

    <p>Who pays for legal services in case of default and power of sale</p> Signup and view all the answers

    What is the advantage of using power of sale for a mortgage lender?

    <p>The procedure is relatively inexpensive compared to a foreclosure</p> Signup and view all the answers

    What action can the mortgage lender take if there is insufficient money from the sale to repay the amount owing on the mortgage loan?

    <p>Pursue the personal covenant for the shortfall</p> Signup and view all the answers

    When can the power of sale proceedings begin?

    <p>Day 16 of the mortgage being in arrears</p> Signup and view all the answers

    What happens if the property is sold for less than what the lender is owed?

    <p>The lender can obtain judgment or garnish wages</p> Signup and view all the answers

    What is the responsibility of the mortgage administrator when selling the property under power of sale?

    <p>To obtain fair market value and possibly reduce the price if necessary</p> Signup and view all the answers

    What action can be taken if the borrower cannot bring the mortgage payments up to date after the notice period?

    <p>The borrower must pay off the entire mortgage or vacate the property</p> Signup and view all the answers

    What is an advantage of using power of sale according to the text?

    <p>The lender can recover funds more quickly compared to foreclosure</p> Signup and view all the answers

    What happens after the property is sold under power of sale?

    <p>All costs and fees will be paid off, and any remaining equity will go to the borrower</p> Signup and view all the answers

    What does Day 15 signify in relation to power of sale proceedings?

    <p>The day when private lenders typically take immediate action</p> Signup and view all the answers

    What action can be taken if there is more equity in the property than the loan balance?

    <p>The mortgage administrator must advise any lender with a lien on the property about power of sale</p> Signup and view all the answers

    What is the primary responsibility of the administrator in managing risks and issues?

    <p>Maintaining a checklist for dealing with any issues that may arise</p> Signup and view all the answers

    In what situation can the mortgage lender start foreclosure proceedings?

    <p>If any covenant under the mortgage is violated</p> Signup and view all the answers

    What is the advantage to the lender once a court order of foreclosure is obtained?

    <p>The mortgage lender becomes the property owner</p> Signup and view all the answers

    What is a disadvantage to the lender in a foreclosure process?

    <p>Land transfer tax is payable upon registration of the final foreclosure order</p> Signup and view all the answers

    What is one of the advantages of a power of sale over foreclosure for the mortgage lender?

    <p>The mortgage lender can sell the property in a timely fashion</p> Signup and view all the answers

    What is the first step in completing a power of sale?

    <p>Completing a search of the title to the property</p> Signup and view all the answers

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