Also called mortgage brokers or mortgage associates, these are the people who help you find a mortgage lender and secure a mortgage for your property. In order to become licensed with RECA, they must register with a mortgage brokerage within one year of completing their education.
CONSUMER TIP: Mortgage “specialists” who work directly for banks or lenders are not necessarily licensed mortgage brokerage professionals. In many cases they are simply bank employees or contractors who help facilitate you obtaining a mortgage with that bank. They do not represent your interests and cannot find you a mortgage from a different lender. Use Find a Professional to learn if the person you are working with holds a licence.
It’s important that borrowers understand the relationship they have with their mortgage broker. Did you know that when you’re talking with a mortgage broker about applying for and getting a mortgage, that broker’s business model may be to represent the lender, not you?
A mortgage brokerage may:
When a mortgage brokerage represents you, as a borrower, you are a client. They must act in your best interests at all times, and will owe you general, fiduciary, and regulatory obligations. These include undivided loyalty, confidentiality, full disclosure, obedience, reasonable care and skill, and full accounting. They will recommend financing options to you, advocate on your behalf, and provide you with confidential advice.
When a mortgage brokerage represents the lender, they act in the lender’s best interests at all times, not yours as the borrower. They can still work with you; however, they will treat you as a customer, not a client.
When you are the customer of a mortgage brokerage, that brokerage must:
The mortgage brokerage cannot give you advice or act in any way that would be a detriment to their lender client. The lender has their undivided loyalty.
A mortgage brokerage may act as an intermediary between you, as a borrower, and potential lenders. In this case, the mortgage brokerage is not representing you or the lender. Neither of you are clients; both are customers.
The brokerage will facilitate the mortgage deal by gathering information, explaining the options, completing the necessary documents, and keeping both sides apprised of the deal’s progress. They will not act to the benefit or detriment of you or the lender(s). Alberta mortgage brokerages often work as intermediaries when working with residential borrowers.
Each relationship option comes with different roles and obligations. In all cases, though, mortgage brokers have a responsibility to clearly explain their role to all of the parties with which they are working.
RECA requires mortgage brokers to have written service agreements when working with clients; that requirement applies whether the client is a borrower or a lender.
Written service agreements enhance consumer protection by providing clarity about the roles and obligations of the parties, and reduce the potential for conflicts and confusion.
Your written service agreement with your mortgage broker will tell you what you can and should expect from your working relationship with your mortgage broker. Your agreement will: