Written Service Agreements - Mortgage Brokerage
Written service agreements enhance consumer protection by giving clarity about the roles and obligations between mortgage brokers and borrowers, and reduce any potential for conflicts and confusion.
Written service agreements will inform borrowers about what they can and should expect from their relationship with their authorized mortgage broker. The agreements will:
- describe the responsibilities and services of the mortgage broker
- outline the obligations of the mortgage broker and the borrower
- set out the fees (if any) or how the mortgage broker will receive their fee
- give consent to collect, maintain, use, and distribute a borrowers’ personal information
- address any potential conflict of interest scenarios
- give consent to “pull’ a credit bureau on the borrower(s)
- give an option for the borrower to receive electronic messages from the mortgage broker after the funding of the transaction
Effective July 1, 2014 mortgage brokers who establish a client relationship with a borrower or lender or act as an intermediary between a borrower and lender must enter into a written service agreement. Mortgage brokers who represent the lender must disclose and get consent in writing from the borrower for the issues identified above.
RECA has sample documents for use by mortgage brokers to comply with written service agreements and other legislative requirements. These sample documents include:
- Representing the Borrower Service Agreement
- Acting as an Intermediary Service Agreement
- Borrower Consent & Disclosure When you Represent the Lender
The content from the existing Disclosures on Relationship and Compensation have been incorporated in these new agreements. The new agreements meet the requirements of the Real Estate Act Rules relating to disclosure of relationship and compensation, and written service agreements, as well as the requirements of the Personal Information Protection Act, the Fair Trading Act and new Canadian Anti-Spam Legislation.
A brokerage may customize the documents to suit their needs. These sample forms or content are not mandatory for use. The documents meet the requirements of the Real Estate Act Rules provide for credit bureau consent, privacy legislation consent, and consent to continue to send commercial electronic messages to borrowers after the funding of the transaction.
You may convert the forms to electronic format and use electronic signatures to sign the documents. You must meet the requirements of the Real Estate Act Rules for electronic documents. For additional information on electronic documents and records see: