Mortgage Brokerage

A person who deals in mortgages on behalf of another for compensation, or holds oneself out as a mortgage broker, is required to have a mortgage broker licence from the Real Estate Council of Alberta (RECA), unless they are exempt by the legislation.

You do not need a licence if you deal in mortgages on your own behalf or lend your own money.

What is a mortgage?

A mortgage is a loan secured by the real estate purchased with the funds from the loan.

Activities that require a licence:

  • soliciting a person to borrow or lend money secured by a mortgage
  • negotiating a mortgage transaction
  • collecting mortgage payments
  • administering mortgages
  • buying mortgages, selling mortgages, exchanging mortgages, or offering to do so
  • holding oneself as a mortgage broker

Groups that do not require a licence:

  • subject to regulations, a bank, treasury branch, credit union, loan corporation, trust corporation, or insurance company
  • an agent or employee of a person referred to in the previous bullet
  • an employee of a person dealing in mortgages as a principal while that principal is so acting in a lawful manner and while the employee is acting within the regular course of employment on behalf of that principal
  • a member in good standing of The Law Society of Alberta acting in the course of and as part of the practice of law
Licensing Examples
  1. An individual designs, maintains, and hosts the website for a mortgage brokerage. The website includes information about current mortgage rates, brokerage services, and the contact information for a mortgage broker. These activities are not dealing in mortgages and a licence is not required.
  2. A large multi-national corporation helps its employees by financing their primary residence. A corporation does not need a licence to deal in mortgages when it has a program to provide housing for its employees.
  3. An unlicensed assistant is alone in the mortgage brokerage office and answers calls from potential borrowers. The potential borrowers provide their personal information over the phone—name, address, assets and liabilities, income, etc.—and request the assistant advise them on their ability to qualify for a mortgage. The assistant requires a licence to collect information and provide advice.
  4. John, a real estate licensee, is good friends with a lending officer at a financial institution. John sold a home to a client and agreed to help him obtain a mortgage through his friend. John negotiates mortgage rates and terms between the lender and his clients. John requires a licence as a mortgage broker to carry out these activities.
  5. Amelia is not a licensee. Amelia’s son, Michael, wants to buy his first home. He needs a mortgage but does not want to go through a financial institution. She agrees to lend him the money and secure the loan with a mortgage. Amelia does not need a mortgage broker licence because she is lending her own money.
  6. A real estate associate refers his buyer to a financial institution for a mortgage. The financial institution offers to pay the associate’s brokerage a referral fee. The brokerage cannot accept the referral fee because the associate is dealing in mortgages on behalf of that financial institution. If the real estate associate refers his buyer to a mortgage broker that deals with multiple lenders, the mortgage broker may pay the associate’s brokerage a referral fee. In the first example, the associate is dealing in mortgages because they are soliciting borrowers for a specific financial institution. In the second example, the associate is referring the borrower to a mortgage broker who deals with multiple lenders.

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