As part of the Provincial Government’s ongoing commitment to consumer protection, a Bill to enact the Mortgage Brokerages and Brokers Act, and repeal the Mortgage Brokers Act has received second reading in the House of Assembly.
Currently, corporations, partnerships, and sole proprietorships are registered as mortgage brokers. Individuals working in a business registered as a mortgage broker are not required to register.
The proposed Act would change the registration framework to a licensing regime, consistent with best practices in the regulation of mortgage brokers and brokerages. Corporations, partnerships, and sole proprietorships currently registered as a mortgage broker would have to meet new licensing requirements as a mortgage brokerage. Individuals working with a currently registered mortgage broker would need to apply for a mortgage broker licence to continue in that capacity.
In addition to licensing requirements, the proposed Act will:
- Introduce education and continuing education requirements;
- Require mortgage brokerages operating a trust account to carry errors and omissions insurance;
- Strengthen requirements regarding disclosures and duties owed to borrowers;
- Authorize the development of a Code of Conduct to guide the provision of services; and
- Authorize administrative penalties.
The proposed changes follow the implementation of the Real Estate Trading Act, 2019, to modernize legislation and strengthen consumer protection for residents of Newfoundland and Labrador when buying a home.
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“The purchase of a home or condominium is a significant transaction. If passed, this new Act would ensure that legislation is current, reflects changes in the industry and meets the needs of mortgage brokers. Most importantly, these changes would strengthen consumer protection for those looking to get a mortgage.”
Honourable Sarah Stoodley
Minister of Digital Government and Service NL
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