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For the official version of the regulations, consult the original documents on file with the Office of the Registrar of Regulations , or refer to the Royal Gazette

Part II .

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Standards of Conduct for Mortgage Brokerages Regulations

made under

Section 90 of the

Mortgage Regulation Act

S.N.S. 2012, c. 11

N.S. Reg. 126/2020 (effective November 1, 2021)

amended to N.S. Reg. 218/2022 (effective November 1, 2022)

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

Definitions

Duties to mortgage lenders and investors in syndicated mortgages

Standards of conduct

Information to be contained in advertisement

Information to be disclosed in correspondence

Duty to provide licence information

Duty to respond to complaint

Entering into unlawful transaction

Restriction on tied selling

Duty to return certain documents

Representing status of payment

Duty to ensure suitability of mortgage for private investor

Duty to verify identity

Duty to disclose information to investors

Duty to provide information about remuneration for referral

Duty to advise respecting borrower’s legal authority

Duty to advise of inaccuracy of mortgage application

Duty to inform if mortgage previously in default

Duties to private investor after completing mortgage transaction

Duties respecting reverse mortgages

Advance payment by borrower

Receiving money from mortgage lender or investor

Duty to establish policies and procedures

Authorizing mortgage brokers

Fees and remuneration paid to unlicensed persons

Duty to act with integrity, independence and competence

Citation

1 These regulations may be cited as the Standards of Conduct for Mortgage Brokerages

Regulations .

Definitions

2 In these regulations,

“Act” means the Mortgage Regulation Act ;

“ Cost of Borrowing Disclosure Regulations ” means the Cost of Borrowing

Disclosure Regulations made under the Act;

“investment completion date”, in relation to a mortgage, means the earlier of the

following dates:

(

i) the date that an investor, or a mortgage brokerage on behalf of an

investor, enters into an agreement to invest in the mortgage,

(ii) the date that the investment in the mortgage is completed.

Duties to mortgage lenders and investors in syndicated mortgages

3 If there is more than 1 lender under a mortgage or if more than 1 investor invests in a

mortgage, a mortgage brokerage owes to each of the mortgage lenders and investors the

duties imposed by these regulations in respect of the mortgage or investment.

Standards of conduct

4 The requirements set out in these regulations are prescribed as standards of conduct for

every licensed mortgage brokerage.

Information to be contained in advertisement

(1) All of the following information is prescribed as the information required by clause

58(2)(

b) of the Act to be contained in an advertisement of a mortgage brokerage:

(

a) for a mortgage brokerage whose name as set out on its licence is, or

includes, a franchise name that the mortgage brokerage is permitted to use

under a franchise agreement, a statement clearly indicating that the

mortgage brokerage is independently owned and operated;

(

b) for an advertisement that identifies a mortgage broker or associate mortgage

broker by name, the name set out on the mortgage broker’s or associate

mortgage broker’s licence;

(

c) for an advertisement that refers to a mortgage broker or associate mortgage

broker, at least 1 reference to the mortgage broker or associate mortgage

broker that includes 1 of the following titles:

(

i) for a mortgage broker, the title “mortgage broker” or “broker” or an

abbreviation of either of those titles,

(ii) for an associate mortgage broker, the title “associate mortgage

broker”, “mortgage broker associate”, “associate broker”, “mortgage

associate” or “associate” or an abbreviation of any of those titles.

(2) In addition to the titles prescribed by clause (1)(c), an advertisement may include

an equivalent title in another language.

Information to be disclosed in correspondence

(1) All of the following information is prescribed as the information required to be

disclosed under subsection 60(1) of the Act by a mortgage brokerage in all

correspondence and other written material prepared or used in the course of the

business:

(

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

(

b) the mortgage brokerage’s licence number;

(

c) for a mortgage brokerage whose name as set out on its licence is, or

includes, a franchise name that the mortgage brokerage is permitted to use

under a franchise agreement, a statement clearly indicating that the

mortgage brokerage 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 information

(1) When requested, a mortgage brokerage must give a person all of the following

information:

(

a) the licence number of the mortgage brokerage;

(

b) subject to subsection (2), the name and licence number of a mortgage broker

or associate mortgage broker who

(

i) is authorized to broker mortgages on behalf of the mortgage

brokerage, and

(ii) is relevant to the nature of the request.

(2) Clause (1)(

b) does not require a mortgage brokerage to give a person the names

and licence numbers of all or substantially all of its mortgage brokers or associate

mortgage brokers.

Duty to respond to complaint

8 On receiving a written complaint about the mortgage business activities of the mortgage

brokerage or of any mortgage broker or associate mortgage broker authorized to broker

mortgages on its behalf, a mortgage brokerage must give the complainant a written

response that contains all of the following:

(

a) the mortgage brokerage’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.

Entering into unlawful transaction

9 A mortgage brokerage must not act as a representative of a borrower, lender or investor

in respect of a mortgage if the mortgage brokerage has reasonable grounds to believe that

the mortgage, its renewal or the investment in it is unlawful.

Restriction on tied selling

(1) A mortgage brokerage must not coerce a borrower, mortgage lender or investor to

obtain a product or service from a particular person, including the mortgage

brokerage, as a condition for obtaining another service from the mortgage

brokerage.

(2) A mortgage brokerage is not coercing a borrower, mortgage lender or investor as

prohibited by subsection (1) if it offers the borrower, mortgage lender or 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 borrower, mortgage

lender or investor obtain another product or service from a particular person,

including the mortgage brokerage.

Duty to return certain documents

11 A mortgage brokerage must promptly, without charge, return a deed, instrument or other

document to its owner.

Representing status of payment

(1) Except as provided in subsection (2), a mortgage brokerage must not, directly or

indirectly, represent to any person or entity that any amount payable to the

mortgage brokerage in connection with carrying on the business of a mortgage

brokerage 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 brokerage for fees payable to record instruments under the Land

Registration Act .

Duty to ensure suitability of mortgage for private investor

13 A mortgage brokerage required to act in the best interests of a private investor must take

reasonable steps to ensure that any investment in a mortgage that it presents for the

consideration of the private investor is suitable for the private investor having regard to

the needs and circumstances of the private investor.

Duty to verify identity

(1) A mortgage brokerage must take reasonable steps to verify the identity of each

borrower, investor and lender in a mortgage transaction that it offers to a borrower,

investor or lender.

(2) To verify the identity of a borrower or investor, a mortgage brokerage may rely on

confirmation from

(

a) a mortgage lender; or

(

b) a mortgage brokerage that represents the borrower or investor.

(3) A mortgage brokerage that is unable to verify the identity of another party to a

mortgage transaction that it offers to a borrower must advise the borrower of this

before the borrower enters into the mortgage agreement or mortgage renewal

agreement with the mortgage lender.

(4) A mortgage brokerage that is unable to verify the identity of another party to a

mortgage transaction that it offers to an investor must advise the investor of this

before the investment completion date.

(5) A mortgage brokerage that is unable to verify the identity of another party to a

mortgage transaction that it offers to a mortgage lender must advise the mortgage

lender of this before

(

a) submitting the borrower’s mortgage application to the mortgage lender; or

(

b) arranging for a mortgage renewal agreement with the mortgage lender.

Duty to disclose information to investors

(1) A mortgage brokerage must disclose all of the following to a lender or investor, or

a potential lender or investor:

(

a) the nature of any relationship between the mortgage brokerage and any

other person involved in the mortgage transaction;

(

b) any conflicts or potential conflicts of interest in connection with the

mortgage transaction;

(

c) any material risks of a mortgage or investment in a mortgage.

(2) A mortgage brokerage must disclose to a lender or potential lender the information

required by subsection (1) before the lender provides a written commitment to fund

the mortgage.

Duty to provide information about remuneration for referral

16 A mortgage brokerage 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

brokerage and the other person;

(

b) a statement of whether the mortgage brokerage has received, may receive or

will receive a fee or other remuneration, directly or indirectly, for making

the referral.

Duty to advise respecting borrower’s legal authority

17 A mortgage brokerage that has reason to doubt a borrower’s legal authority to mortgage

a property must advise each prospective lender and investor of this at the earliest

opportunity.

Duty to advise of inaccuracy of mortgage application

18 A mortgage brokerage that has reason to doubt the accuracy of information contained in

a borrower’s mortgage application, or in a document submitted in support of the

application, must advise each prospective lender and investor of this at the earliest

opportunity.

Duty to inform if mortgage previously in default

19 A mortgage brokerage must not sell or attempt to sell, or arrange or attempt to arrange

the sale of, a mortgage that has been in default at any time in the previous 12 months

unless the mortgage brokerage clearly discloses the default and the amount and duration

of the default.

Duties to private investor after completing mortgage transaction

20 Promptly after completing a mortgage transaction with a private investor, a mortgage

brokerage must ensure that the private investor is provided with a copy of each of the

following:

(

a) the recorded mortgage;

(

b) the printout of the parcel register at the land registration office for the

property affected by the mortgage, showing the recording of the mortgage;

(

c) the lawyer’s report, if any, with respect to the recording of the mortgage and

the effect of the mortgage transaction;

(

d) the written disclosure provided to the borrower as required by the Cost of

Borrowing Disclosure Regulations .

Duties respecting reverse mortgages

(1) In this Section, “reverse mortgage” means a mortgage that satisfies both of the

following conditions:

(

a) the money that is advanced under the mortgage does not have to be repaid

until the occurrence of 1 or more of the following events:

(

i) the borrower’s death or, if there is more than 1 borrower, the death of

the last surviving borrower,

(ii) the acquisition by the borrower or, if there is more than 1 borrower,

the last surviving borrower of another dwelling to use as their

principal residence,

(iii) the sale of the mortgaged property,

(iv) the borrower or, if there is more than 1 borrower, the last surviving

borrower vacating the mortgaged property to live elsewhere with no

reasonable prospect of returning,

(

v) an event of default under the conditions of the mortgage;

(b) 1 or more of the following conditions applies while the borrower or, if there

is more than 1 borrower, the last surviving borrower continues to occupy the

mortgaged property as their principal residence and otherwise complies with

the terms of the mortgage:

(

i) no instalment repayments of the principal and no payment of interest

on the principal are due or capable of becoming due,

(ii) although interest payments may become due, no repayment of all or

part of the principal is due or capable of becoming due,

(iii) although interest payments and repayment of part of the principal

may become due, repayment of all of the principal is not due or

capable of becoming due.

(2) A mortgage brokerage must not arrange a reverse mortgage with a borrower unless

the mortgage brokerage receives from the borrower a written statement signed by a

lawyer stating that the lawyer has given the borrower independent legal advice

about the proposed reverse mortgage.

(3) Each mortgage brokerage that arranges a reverse mortgage must provide written

documentation to the borrower that illustrates the annual accumulation of interest

under the proposed reverse mortgage and the corresponding effect on the equity of

the borrower in the mortgaged property, for the period from the advancing of funds

until all of the equity of the borrower in the property is exhausted, with respect to

all of the following scenarios:

(

a) the interest rate and the value of the property remain the same over the

period set out in the illustration;

(

b) the interest rate remains the same over the period set out in the illustration

and the value of the property increases by 1% per year;

(

c) if the interest rate is capable of increasing under the mortgage, the interest

rate increases by 2% per year after the 2nd year and remains the same for

the remaining period set out in the illustration, and the value of the property

increases by 1% per year;

(

d) if the interest rate is capable of increasing under the mortgage, the interest

rate increases by 2% per year after the 2nd year and remains the same for

the remaining period set out in the illustration, and the value of the property

remains the same over the period set out in the illustration.

(4) In preparing the written documentation required by subsection (3), a mortgage

brokerage must assume that the borrower makes no payments under the mortgage

during the period set out in the illustration other than the payments required to be

paid under the mortgage.

Advance payment by borrower

(1) Except as provided in subsection (2), a mortgage brokerage must not charge,

collect or attempt to collect a fee from a borrower in relation to a mortgage to

which the Cost of Borrowing Disclosure Regulations apply until all of the

following have occurred:

(

a) the mortgage lender has provided a written confirmation to fund the

mortgage;

(

b) the commitment has been accepted by the borrower in writing;

(

c) a copy of the signed commitment has been provided to the borrower.

(2) This

Section does not apply with respect to actual fees disbursed by a mortgage

brokerage to third parties for credit reports, registration fees, courier services or

appraisal services if there is an existing written agreement between the mortgage

brokerage and the borrower that provides for the borrower to reimburse the

mortgage brokerage for these costs.

Receiving money from mortgage lender or investor

(1) A mortgage brokerage must not receive money from a lender or enter into an

agreement to receive money from a lender for any activity requiring a mortgage

brokerage licence unless an application has been made for a mortgage on a specific

property.

(2) A mortgage brokerage must not receive money from an investor or enter into an

agreement to receive money from an investor in connection with any activity

requiring a mortgage brokerage licence unless an existing mortgage is available on

a specific property.

Duty to establish policies and procedures

(1) A mortgage brokerage must establish and implement policies and procedures that

are reasonably designed to ensure that the mortgage brokerage and each mortgage

broker and associate mortgage broker who is authorized to broker mortgages on its

behalf complies with the requirements of the Act and its regulations, including all

of the following:

(

a) describing the role of the mortgage brokerage in relation to borrowers,

lenders and investors and disclosing to a borrower, lender or investor the

mortgage brokerage’s relationship with each party to a transaction;

(

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

(

c) determining the suitability of a mortgage or investment in a mortgage for a

borrower, lender or private investor;

(

d) identifying the material risks of a mortgage or investment in a mortgage for

a borrower, lender or investor and disclosing the material risks to the

borrower, lender or investor;

(

e) identifying potential conflicts of interest between the mortgage brokerage or

any mortgage broker or associate mortgage broker authorized to broker

mortgages on its behalf and a borrower, lender or investor that is

represented by the mortgage brokerage, and disclosing a potential conflict of

interest to the borrower, lender or investor;

(

f) any incentives other than money provided by other persons to its mortgage

brokers and associate mortgage brokers for brokering mortgages, if the

mortgage brokerage permits any of its mortgage brokers or associate

mortgage brokers to receive those incentives;

(

g) resolving complaints about its mortgage brokerage activities or those of any

mortgage broker or associate mortgage broker authorized to broker

mortgages on its behalf.

(2) A mortgage brokerage must establish and implement policies and procedures

providing for the adequate supervision of every mortgage broker and associate

mortgage broker who is authorized to broker mortgages on its behalf.

Authorizing mortgage brokers

(1) A mortgage brokerage must not authorize an individual to broker mortgages on its

behalf unless the mortgage brokerage takes reasonable steps to satisfy itself that the

individual is eligible to be licensed as a mortgage broker or associate mortgage

broker.

(2) A mortgage brokerage must immediately notify the Registrar on becoming aware

that there may be reasonable grounds for the Registrar to determine that a

mortgage broker or associate mortgage broker is not eligible to be licensed as a

mortgage broker or associate mortgage broker.

Fees and remuneration paid to unlicensed persons

(1) A mortgage brokerage must not pay a fee or other remuneration to an unlicensed

person for any activity requiring a licence unless the other person is exempt from

the requirement to hold a licence for that activity under the Exemption Regulations

made under the Act.

(2) A mortgage brokerage must not pay a fee or other remuneration to an individual

licensed to broker mortgages on behalf of another mortgage brokerage.

Duty to act with integrity, independence and competence

27 A mortgage brokerage must always act with integrity, independence and competence

when carrying on the business of brokering mortgages.

Legislative History

Reference Tables

Standards of Conduct for Mortgage Brokerages

Regulations

N.S. Reg.

126/2020

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 Brokerages 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

126/2020

Nov 1, 2021

date

specified (date that Act comes into force on proclamation)

Oct 9, 2020

218/2022

Nov 1, 2022

date specified

Oct 7, 2022

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

5(1)(c)(ii) ..........................................

rs . 218/2022

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.