The activities undertaken by mortgage broker industry members that require an authorization from the Real Estate Council of Alberta (RECA) are called “dealing in mortgages.”
What activities are considered “deals in mortgages”?
“Dealing in mortgages” includes where a person on behalf of another person for consideration or compensation, solicits a person to borrow or lend money that will be secured by a mortgage, negotiates a mortgage transaction, collects mortgage payments and otherwise administering mortgages, and buys, sells and exchanging mortgages (or simply offering to do so). All of these activities require an authorization from RECA.
Who needs to be authorized to deal in mortgages?
The Real Estate Act of Alberta (Act) requires any person who deals in mortgages to hold an authorization with RECA, unless there is an exemption in the relevant legislation. There are exemptions in the Act for banks, treasury branches, credit unions, loan corporations, trust corporations and insurance companies, and their agents and employees. For a full list of exemptions, please review the legislation section of this website.
What do mortgage brokers do?
In general, terms a mortgage broker can be described as the matchmaker between a borrower and a lender with the goal of originating a mortgage loan. Typically, a mortgage broker draws from a pool of various lenders to find the right match; however, some mortgage brokers only do business with one lender. A standard level of competency ensures that mortgage industry members are well trained and up to date with current industry trends.
The legal entity or company which deals in mortgages is known as the brokerage. Each brokerage has a registered broker, an individual who has specific responsibilities including ensuring adequate supervision of associates, proper management and control of documents, and proper maintenance of trust accounts. All associates deal in mortgages on behalf of a brokerage.
Individuals considering a career in the mortgage brokerage industry must meet a number of eligibility requirements in order to become licensed with a brokerage. For a complete list of the eligibility requirements, click on the “New to the Industry” link below.
For more information about mortgage broker industry member licensing, please see:
New to the Industry
Opening a Brokerage