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Which activities are regulated under the MBLAA?
Dealing/trading in mortgages in ON, carrying on business as a lender or of administering mortgages in ON.
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What is a limited partnership?
An association of 2+ partners formed to conduct a business jointly and in which one or more partners is liable only to the extent of the amount of money they have invested.
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Proprietor/Sole Proprietor?
sole owner of an unincorporated business.
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Tied Selling?
Act of requiring a borrower, lender or investor to obtain a product/service as a condition for obtaining another product/service. This is Prohibited!
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Mortgage Default Insurance?
insurance policy between the insurer and Lender that will compensate the Lender for losses suffered on an insured loan.
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How does mortgage default insurance work?
A premium is charged to the Lender who typically passes it on to the borrower. Borrower may pay the premium in a lump sum payment on advance, normally it is added to the amount borrowed and payed from the mortgage funds on closing.
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What are the benefits of mortgage default insurance?
Allows the lender to make loans over 80% LTV and recover insured losses. Allows borrowers to receive high ratio mortgages with favourable terms and interest rates.
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What is capitalization?
Lender adds amount of arrears to the loan principal amount, ie. Lender's fees.
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What are the 2 types of mortgage creditor insurance?
- 1) Life Insurance by an institutional lender
- 2) Life Insurance through a 3rd party not affiliated with an institutional lender
- Both pay lender upon death of the insured.
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Institutional Mortgage Creditor Insurance?
From the Lender, usually in the branch of the lender when borrower applies for the mortgage. Insurance premium is usually included in the mortgage payment. Only 3 basic health questions. Switching lender will result in having to reapply for insurance with new lender. Declines with the amount of the mortgage.
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When does mortgage creditor insurance expire?
when the mortgage is paid off or the borrower reaches 70 years old
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Benefits of Mortgage Protection Plan?
Life and Disability insurance, portable so can be taken with the borrower to a new lender, only available through a mortgage broker.
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What is better between Life Insurance and Mortgage Creditor Insurance?
Life Insurance, better coverage
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What is covered under Home Insurance?
Building coverage, Named-Perils coverage (fire, theft, water) rare, Contents coverage, Detached private structure (garage), Additional living expenses (hotel/food if forced to leave), Personal liability (protection from paying damages to people)
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What is Title Insurance?
For title-related risks; forgery, fraud, missing heirs, etc. that affect rights of ownership
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What is Errors & Omissions Insurance?
Insurance policy that covers the professional from claims made against him due to negligence and must contain a provision against fraud.
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Chattel Loan?
Borrow funds for the purchase of movable personal property from the lender. Lender secures the loan with a mortgage against the chattel.
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What is a lien?
Security against a property, either real or personal for a debt.
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What does NOM% stand for?
annual rate of interest
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What does EFF% stand for?
Annual rate of interest with one compounding period.
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What is meant by Bait & Switch?
Brokerage attracts consumers by advertising a product at a rate lower than the market rate, but never actually providing that rate.
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What is post-purchase cognitive dissonance?
buyer's remorse
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What is meant by PIPEDA consent?
A document that allows the mortgage agent to use the applicant's personal info.
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What documents are required for a purchase
Purchase and Sale Agreement, MLS Listing, Proof of Downpayment, Rental Letter (if applicable), Realtor Information
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Documents required for a refinance, equity take out and switch?
Current mortgage statement, Charge/Mortgage, Transfer/Deed, Property Tax Statement, Property Insurance Policy, Mortgage Repayment History (if applicable)
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