Description
This course is mandatory for all Mortgage Agent Level 1 licensees in Ontario who want to upgrade to a Level 2 license.
🔑 Level 1 vs. Level 2
- A Level 1 Agent can only arrange mortgages with financial institutions and lenders approved under the National Housing Act.
- A Level 2 Agent can work with all lenders, including private individuals, mortgage investment companies, syndicates, brokers, and brokerages.
📋 Price: $149 (50% off until January 31, 2025)
⏳ Study Pace: Self-paced – finish in 1 week or take up to 6 months
📖 Course Materials: Immediate online access, including a PDF textbook
✅ Final Exam: 50 multiple-choice questions, 70% to pass
🎯 Exam Prep: Online preparation tools to help you succeed
💬 Instructor Support: Direct messaging with your instructor
Learning Outcomes
General
- Private Lenders vs. Financial Institutions: Be able to describe which lenders are private lenders and which are financial institutions in the relevant province.
- Legal and Regulatory Framework: Be able to explain the legal and regulatory framework for private mortgages.
- Private Lending Structures: Be able to describe structures such as MICs, syndicates, and individuals.
- Regulatory Structures: Be able to explain the regulations for different private lending structures.
- Comparison of Structures: Be able to compare private lending structures with financial institutions.
- Transaction Stages: Be able to outline the stages of a private mortgage transaction.
- Fraud Identification: Be able to analyze private lending transactions and identify potential instances of fraud.
Working with the Borrower
- Borrower Risks: Be able to explain the borrower’s risks associated with each private lending structure.
- Needs Assessment: Be able to determine the borrower’s needs, circumstances, and preferences, and evaluate the appropriateness of private mortgage options.
- Impact of Terms: Be able to demonstrate how the terms and conditions of a private mortgage impact the borrower.
- Credit Recovery: Be able to recommend private mortgage options to help a borrower recover credit and qualify for mortgages with financial institutions.
Working with the Lender/Investor
- Lender Risks: Be able to explain the lender/investor’s risks associated with each private lending structure.
- Required Documentation: Be able to explain the additional information and documentation required for private mortgage transactions.
- Conflicts of Interest: Be able to identify and describe potential conflicts of interest when arranging mortgages for lenders.
- Information Gathering: Be able to evaluate information about the borrower, property, and transaction for lender decision-making.
- Reporting: Be able to create a report on property, project, borrower, mortgage, and transaction risks for lenders.
- Lender Needs Assessment: Be able to evaluate a lender’s needs, circumstances, and risk appetite for private mortgage opportunities.
Working in Mortgage Administration
- Licensing Requirements: Be able to describe licensing requirements for administering mortgages.
- Administration Process: Be able to outline the mortgage administration process and requirements.
- Reporting: Be able to create accurate reports on private mortgages.
- Foreclosure Strategy: Be able to develop strategies for addressing mortgage foreclosures.
Topics – Private Lending Overview
- Role of the mortgage broker:
- Working with the borrower
- Working with the lender/investor
- Acting as the administrator
- Potential conflicts of interest:
- Acting for the borrower
- Acting for the lender/investor
- Private lending structures/sources:
- Mortgage Investment Corporations (MICs)
- Syndicates
- Individuals
- Risks associated with private lending structures:
- Risks for borrowers
- Risks for lenders/investors
- Circumstances for private mortgages:
- Access equity, debt consolidation, construction, commercial, bridge financing, non-conforming property, mixed-use property, time sensitivity
- Points of comparison with financial institutions:
- Transaction process, rates, terms, risks, fees, penalties, disclosures, foreclosures
- Potential benefits of private mortgages:
- Correct credit and debt issues
- Improve borrower’s financial position
Topics – Regulatory Framework
- Regulatory authorities
- Applicable statutes and regulations
- Licensing requirements and restrictions
- Consequences for noncompliance
- Standards of practice
Topics – Private Lending Transaction Process
- Relationships and roles within transactions
- Due diligence (e.g., understanding the client, property, mortgage, documentation)
- Client expectations
- Regulatory requirements
- Disclosures
- Documentation
- Funds held in trust
Topics – Preparing the Transaction
- Stages of private mortgage transactions:
- Qualifying a lead, information gathering, submitting an application, preparing a proposal, closing a deal, funding
- Establishing expectations with borrowers and lenders/investors
- Identifying and gathering required information:
- Assessing the borrower, lender/investor, property, private mortgage options
- Underwriting:
- Property valuation, borrower’s ability to pay, loan details, risks, purpose of loan
- Disclosures:
- Cost of credit, private lending-specific disclosures, initial mortgages and renewals
- Communicating terms and conditions
- Presenting the transaction to lenders/investors
Topics – Administration
- Regulatory requirements and additional authorizations
- Service agreements
- Fees and compensation
- Managing payments
- Monitoring and assessing value
- Communication and reporting to lenders/investors
- Managing risks, issues, and foreclosures
Topics – Fraud
- Overview of mortgage fraud
- Private lending fraud schemes
- Red flags for private lending fraud
Source: Mortgage Broker Regulators’ Council of Canada (MBRCC), “Private Mortgages Course Learning Outcomes and Topics” [PDF]
