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