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Standards of Conduct for Mortgage Administrators Regulations

made under Section 90 of the

Mortgage Regulation Act

S.N.S. 2012, c. 11

N.S. Reg. 129/2020 (effective November 1, 2021)



Table of Contents


Please note: this table of contents is provided for convenience of reference and does not form part of the regulations.
Click here to go to the text of the regulations.

 

Citation

Definition

Duties to multiple investors in syndicated mortgage

Standards of conduct

Information to be contained in advertisement

Information to be disclosed in correspondence

Duty to provide licence number

Duty to respond to complaints

Duty to verify identity

Duty to disclose conflicts of interest

Entering into unlawful transaction

Restriction on tied selling

Duty to return certain documents

Representing status of payment

Required content for administration agreement

Required content for statement to private investor

Duty to provide information about remuneration for referral

Payments to investor

Withdrawals for remuneration

Payment on redemption of mortgage

Duty to establish policies and procedures

Duty to have financial guarantee

Receiving trust money

Depositing trust money

Withdrawing trust money

Duty to report shortfall in trust account

Duty to act with integrity, independence and competence


 


Citation

1        These regulations may be cited as the Standards of Conduct for Mortgage Administrators Regulations.


Definition

2        In these regulations,

 

“Act” means the Mortgage Regulation Act.


Duties to multiple investors in syndicated mortgage

3        If more than 1 investor invests in a mortgage, the mortgage administrator owes to each of the investors the duties imposed by these regulations in respect of the investment.


Standards of conduct

4        The requirements set out in these regulations are prescribed as standards of conduct for every licensed mortgage administrator.


Information to be contained in advertisement

5        For a mortgage administrator whose name as set out on its license is, or includes, a franchise name that the mortgage administrator is permitted to use under a franchise agreement, a statement clearly indicating that the mortgage administrator is independently owned and operated is prescribed as the information required by clause 58(2)(b) of the Act to be contained in an advertisement.


Information to be disclosed in correspondence

6        (1)    All of the following is prescribed as the information required to be disclosed under subsection 60(1) of the Act by a mortgage administrator in all correspondence and other written material prepared or used in the course of the business:

 

                   (a)      the mortgage administrator’s name as set out on its licence;

 

                   (b)     the mortgage administrator’s licence number;

 

                   (c)      for a mortgage administrator whose name as set out on its licence is or includes a franchise name that the mortgage administrator is permitted to use under a franchise agreement, a statement clearly indicating that the mortgage administrator is independently owned and operated.

 

          (2)    The name and licence number referred to in clauses (1)(a) and (b) must be clearly and prominently displayed wherever they are required to be disclosed.


Duty to provide licence number

7        When requested, a mortgage administrator must give a person its licence number.


Duty to respond to complaints

8        On receiving a written complaint about its mortgage administration activities, a mortgage administrator must give the complainant a written response that contains all of the following:

 

                   (a)      the mortgage administrator’s proposed resolution of the complaint;

 

                   (b)     a statement that, if the complainant is not satisfied with the proposed resolution and believes that the complaint relates to a contravention of the Act or a regulation made under the Act, the complainant may refer the complaint to the Registrar.


Duty to verify identity

9        (1)    A mortgage administrator must take reasonable steps to verify the identity of each investor in a mortgage before entering into an agreement with an investor to administer the mortgage.

 

          (2)    To verify the identity of an investor, a mortgage administrator may rely on confirmation from a mortgage brokerage or a mortgage lender.


Duty to disclose conflicts of interest

10      A mortgage administrator must disclose to an investor or a potential investor any conflicts or potential conflicts of interest in connection with administering the mortgage.


Entering into unlawful transaction

11      A mortgage administrator must not administer a mortgage for an investor if the mortgage administrator has reasonable grounds to believe that the mortgage, its renewal or the investment in it is unlawful.


Restriction on tied selling

12      (1)    A mortgage administrator must not coerce an investor to obtain a product or service from a particular person, including the mortgage administrator, as a condition for obtaining another service from the mortgage administrator.

 

          (2)    A mortgage administrator is not coercing an investor as prohibited by subsection (1) if it offers the investor more favourable terms for a product or service than it would otherwise offer, and the more favourable terms are offered on the condition that the investor obtain another product or service from a particular person, including the mortgage administrator.


Duty to return certain documents

13      A mortgage administrator must promptly, without charge, return a deed, instrument or other document to its owner.


Representing status of payment

14      (1)    Except as provided in subsection (2), a mortgage administrator must not, directly or indirectly, represent to any person that any amount payable to the mortgage administrator in connection with administering mortgages is set or approved by any government authority.

 

          (2)    Subsection (1) does not apply with respect to disbursements that may be made by a mortgage administrator for fees payable to record instruments under the Land Registration Act.


Required content for administration agreement

15      (1)    All of the following are prescribed as the terms and conditions required to be included under clause 38(a) of the Act in a written agreement between a mortgage administrator and a private investor:

 

                   (a)      the duty of the mortgage administrator to promptly notify each private investor if the mortgage administrator becomes aware of any significant change in circumstances that could adversely affect the mortgage;

 

                   (b)     the duty of the mortgage administrator to promptly notify each private investor if the borrower defaults under the mortgage.

 

          (2)    An agreement between a mortgage administrator and a private investor that does not include the terms and conditions prescribed in subsection (1) is deemed to include them.

 

          (3)    All of the following is prescribed as the information required to be contained in a written agreement under clause 38(b) of the Act between a mortgage administrator and a private investor with respect to a mortgage to be administered by the mortgage administrator:

 

                   (a)      the name in which the mortgage is or will be recorded under the Land Registration Act or under the laws of another jurisdiction;

 

                   (b)     for a mortgage held in trust, the details of the trust, including the terms of the trust and the terms on which the trust money is to be received, held, and disbursed;

 

                   (c)      particulars of the circumstances in which a private investor is permitted to assign or transfer all or part of the private investor’s interest in the mortgage;

 

                   (d)     the disposition to be made of all payments made under the mortgage by the borrower, including penalties and bonuses;

 

                   (e)      the rights and duties of each private investor under the agreement if the borrower defaults under the mortgage, and the costs that each private investor is responsible for;

 

                   (f)      the procedures to be followed under the agreement in any of the following circumstances and the rights and duties of each private investor in either case:

 

                              (i)      foreclosure,

 

                              (ii)     the exercise of a power of sale under the mortgage;

 

                   (g)     the fees payable by each private investor for the administration of the mortgage, including how the fees are to be calculated and the method of payment;

 

                   (h)     a description of the private investor’s interest in the mortgage, including, if the interest represents less than the entire mortgage, the percentage of the mortgage that the interest represents;

 

                   (i)      a copy of the mortgage agreement that creates the private investor’s interest in the mortgage.


Required content for statement to private investor

16      (1)    All of the following is prescribed as the information required to be disclosed under subsection 40(1) of the Act in the statement provided by a mortgage administrator to a private investor before entering into an agreement with the private investor:

 

                   (a)      whether the mortgage administrator has received, may receive or will receive a fee or other remuneration, directly or indirectly, from another person in connection with the administration of the mortgage;

 

                   (b)     whether the mortgage administrator has paid, may pay or will pay a fee or other remuneration, directly or indirectly, to another person in connection with administering the mortgage;

 

                   (c)      if a fee or other remuneration is or may be payable under clause (a) or (b), all of the following information:

 

                              (i)      the identity of the person to whom the fee or other remuneration is paid,

 

                              (ii)     the basis for calculating the amount of the fee or other remuneration,

 

                              (iii)    for a benefit other than money, the nature of the benefit;

 

                   (d)     the nature of any relationship between the mortgage administrator and each borrower under the mortgage;

 

                   (e)      any conflict of interest that the mortgage administrator or an employee engaged in administering the mortgage may have in connection with the mortgage;

 

                   (f)      a copy of the proposed agreement.

 

          (2)    On providing a statement to a private investor, a mortgage administrator must obtain the private investor’s written acknowledgment that the mortgage administrator has disclosed the information prescribed in this Section.

 

          (3)    The prescribed period for providing a private investor with an additional statement after a change to any of the information required to be disclosed, as required by subsection 40(2) of the Act, is 5 business days after the mortgage administrator becomes aware of the change.


Duty to provide information about remuneration for referral

17      A mortgage administrator that refers a borrower or private investor or a prospective borrower or private investor to another person for a fee or other remuneration must give all of the following information in writing to the borrower or private investor or prospective borrower or private investor either before or when making the referral:

 

                   (a)      a description of the nature of the relationship between the mortgage administrator and the other person;

 

                   (b)     a statement of whether the mortgage administrator has received, may receive or will receive a fee or other remuneration, directly or indirectly, for making the referral.


Payments to investor

18      (1)    A mortgage administrator must not make a payment to an investor in connection with administering a mortgage unless the payment is made from the funds paid under the mortgage by a borrower.

 

          (2)    A mortgage administrator that receives payment of an amount from a borrower in the form of a cheque, other than a certified cheque, must not make a payment from the amount to an investor until after the cheque has cleared and the mortgage administrator has received the funds.


Withdrawals for remuneration

19      A mortgage administrator must not withdraw money from a trust account to pay remuneration to a mortgage brokerage, mortgage lender or mortgage administrator with respect to a mortgage unless all of the following conditions are met:

 

                   (a)      the money is withdrawn by way of cheque or electronic transfer payable to the mortgage brokerage, mortgage lender or mortgage administrator;

 

                   (b)     the terms of the withdrawal are included in the administration agreement for the mortgage.


Payment on redemption of mortgage

20      A mortgage administrator that receives proceeds from the redemption or partial redemption of a mortgage must promptly pay the full amount owing to the investor.


Duty to establish policies and procedures

21      (1)    A mortgage administrator must establish and implement policies and procedures that are reasonably designed to ensure that the mortgage administrator and each person acting on its behalf in the business of mortgage administration complies with the requirements of the Act and its regulations, including all of the following:

 

                   (a)      taking steps to verify the identity of borrowers, lenders and investors;

 

                   (b)     identifying and disclosing to an investor any potential conflicts of interest that the mortgage administrator or any employee engaged in administering a particular mortgage may have in connection with the mortgage;

 

                   (c)      resolving complaints about its mortgage administration activities.

 

          (2)    A mortgage administrator must establish and implement policies and procedures providing for the adequate supervision of each person acting on its behalf in the business of mortgage administration.


Duty to have financial guarantee

22      A mortgage administrator must maintain a financial guarantee in an amount equal to at least $25 000 in a form acceptable to the Registrar.


Receiving trust money

23      Each mortgage administrator that receives trust money must do all of the following:

 

                   (a)      provide a receipt to the person from whom the trust money was received, showing all of the following:

 

                              (i)      the amount of trust money received,

 

                              (ii)     the form or manner in which the trust money was received,

 

                              (iii)    the date that the mortgage administrator received the trust money,

 

                              (iv)    the name of the person that the trust money was received from and, if the trust money was received on behalf of another person, the name of that person,

 

                              (v)     the purpose that the trust money was received for, including any particulars of the mortgage that the trust money relates to,

 

                              (vi)    the name of the employee who received the trust money on behalf of the mortgage administrator;

 

                   (b)     ensure that a duplicate deposit receipt or other documentary evidence of the deposit is prepared showing, or having appended to it, sufficient particulars to permit each payment into the trust account to be separately identified by

 

                              (i)      the amount of the payment, and

 

                              (ii)     the name of the person that the trust money was received from.


Depositing trust money

24      (1)    The prescribed period within which a mortgage administrator must deposit trust money into a trust account under clause 51(a) of the Act is 2 business days.

 

          (2)    Each of the following is prescribed as a financial institution that may hold a trust account for the purposes of clause 51(a) of the Act:

 

                   (a)      a bank or authorized foreign bank within the meaning of section 2 of the Bank Act (Canada);

 

                   (b)     a credit union to which the Credit Union Act applies;

 

                   (c)      a body corporate to which the Trust and Loan Companies Act (Canada) applies;

 

                   (d)     a retail association as defined in the Cooperative Credit Associations Act (Canada).


Withdrawing trust money

25      (1)    Each withdrawal of money by a mortgage administrator from a trust account must be done by 1 of the following methods:

 

                   (a)      a cheque that meets all of the following conditions:

 

                              (i)      it is numbered and includes on its face words identifying it as being drawn against a trust account,

 

                              (ii)     it includes a reference to the transaction to which it relates that is sufficient to permit the cheque to be identified with the corresponding disbursement recorded in the records of the mortgage administrator;

 

                   (b)     an electronic transfer that meets all of the following conditions:

 

                              (i)      the financial institution where the trust account is maintained is able to produce a written confirmation showing all the following details of the electronic transfer:

 

                                        (A)   the date of the transfer,

 

                                        (B)   the name of the financial institution and the account name and account number of the trust account that the trust money was withdrawn from,

 

                                        (C)   the name of the financial institution and the account name and account number of the account that the trust money was transferred to,

 

                                        (D)   the amount of trust money transferred,

 

                              (ii)     an automated teller machine card is not used to make the transfer.

 

          (2)    A mortgage administrator that transfers trust money by way of electronic transfer in accordance with clause 1(b) to an account that the mortgage administrator has not previously transferred trust money to must

 

                   (a)      no later than 5 days after the date of the transfer, obtain a confirmation from the intended recipient of the trust money that the trust money was received; and

 

                   (b)     prepare a record that documents all of the following about the confirmation required by clause (a):

 

                              (i)      the date it was received by the mortgage administrator,

 

                              (ii)     the name of the individual who provided it.


Duty to report shortfall in trust account

26      A mortgage administrator that determines that there is a shortfall in a trust account must immediately notify the Registrar.


Duty to act with integrity, independence and competence

27      A mortgage administrator must always act with integrity, independence and competence when carrying on the business of administering mortgages.



 

 


Legislative History
Reference Tables

Standards of Conduct for Mortgage Administrators Regulations

N.S. Reg. 129/2020

Mortgage Regulation Act

Note:  The information in these tables does not form part of the regulations and is compiled by the Office of the Registrar of Regulations for reference only.

Source Law

The current consolidation of the Standards of Conduct for Mortgage Administrators Regulations made under the Mortgage Regulation Act includes all of the following regulations:

N.S.
Regulation

In force
date*

How in force

Royal Gazette
Part II Issue

129/2020

Nov 1, 2021

date specified (date that Act comes into force on proclamation)

Oct 9, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following regulations are not yet in force and are not included in the current consolidation:

N.S.
Regulation

In force
date*

How in force

Royal Gazette
Part II Issue

 

 

 

 

 

 

 

 

 

 

 

 

*See subsection 3(6) of the Regulations Act for rules about in force dates of regulations.

Amendments by Provision

ad. = added
am. = amended

fc. = fee change
ra. = reassigned

rep. = repealed
rs. = repealed and substituted

Provision affected

How affected

..........................................................

 

 

 

 

 

 

 

 

 

Note that changes to headings are not included in the above table.

Editorial Notes and Corrections

 

Note

Effective
date

 

 

 

 

 

 

 

 

 

Repealed and Superseded

N.S.
Regulation

Title

In force
date

Repealed
date

 

 

 

 

Note:  Only regulations that are specifically repealed and replaced appear in this table.  It may not reflect the entire history of regulations on this subject matter.

 

 

 


Webpage last updated: 01-11-2021