Guideline on acceptable and unacceptable activities for unlicensed assistants

Purpose

The provision of mortgage services in British Columbia is governed by the Mortgage Services Act (MSA), the Mortgage Services Regulation (Regulation), and the Mortgage Services Rules (Rules). Individuals and entities licensed to provide mortgage services in B.C. must comply with all applicable requirements set out in this framework.

Under the MSA, any activity that falls within the statutory definition of “mortgage services” requires a licence. Unlicensed individuals are strictly prohibited from performing such activities. As a result, unlicensed assistants may not engage in any tasks that constitute mortgage services under the MSA.

This document provides guidance and best practices outlining the types of functions unlicensed assistants may perform in support of licensees, including principal brokers and brokerages.

Principal brokers, mortgage brokers, and brokerages may employ unlicensed assistants to carry out various day-to-day administrative tasks that would otherwise be performed by a licensee. However, where a licensee engages an assistant, the licensee remains responsible for ensuring that the assistant does not undertake any activities regulated under the MSA. This includes providing appropriate supervision and clearly defining and delegating tasks.

Compensating an unlicensed assistant for performing activities that require a licence constitutes non-compliance with the MSA and may result in enforcement action.

Guidelines

Acceptable Activities for Unlicensed Assistants

Unlicensed assistants may perform the following activities while under the supervision of a licensee:

• Answer the telephone, take messages, and forward calls to licensees; 
• Schedule appointments for licensees (this does not include making telephone calls, telemarketing, or performing other activities to solicit business on behalf of licensees); 
• Order certain documents upon the instruction of a licensee, including credit bureau reports and appraisals; 
• Act as a liaison between the licensee and the borrower or lender by accepting or sending documentation relating to a mortgage application, provided that the documentation has been reviewed and vetted by the licensee and all confidentiality requirements of the MSA are maintained;  
• Perform accounting or bookkeeping services for the brokerage;  
• Prepare documentation for the licensee to execute with clients, such as agreements and disclosure forms, provided that the documentation will be reviewed and vetted by the licensee; and  
• Prepare advertising material for the licensee, provided that the licensee reviews the material in advance of submission and publishing.  

Unacceptable Activities for Unlicensed Assistants

Unlicensed assistants must not perform any of the following activities:

• Make telephone calls, engage in telemarketing, send emails, or perform other activities to solicit mortgage business from the public or other related industry members; 
• Provide mortgage advice or information to clients or potential clients, including advice or information relating to mortgage rates, terms, conditions, fees, or qualifications; 
• Accept mortgage applications from borrowers or lenders;  
• Communicate with lenders about the merits of borrower applications, and vice versa; 
• Determine what documentation is required from a borrower or a lender in a mortgage transaction; 
• Review and vet borrower qualification information, including pay stubs, job letters, gift letters, financial statements, bank statements, notices of assessment, income tax returns or credit bureau reports; 
• Review and vet property related information including appraisals, surveys, MLS information, contracts of purchase and sale, title searches, or environmental reports; 
• Review and explain disclosure documents with clients; 
• Negotiate fees or commissions with borrowers and lenders; 
• Negotiate mortgage arrangements or discuss mortgage agreements or commitments with clients; 
• Claim that they are licensed under the MSA; and 
• Conduct any other functions for which licensing under the MSA is required. 

Understanding the Risks of Hiring an Unlicensed Assistant Who Works at Multiple Brokerages

There are risks in permitting assistants to work at multiple brokerages. For instance, it could create conflicts of interest that licensees are required to take reasonable steps to avoid and disclose to their clients, per the MSA Rules. Unlicensed assistants are often privy to confidential information about clients. If an unlicensed assistant is working at multiple brokerages, they may have information about one brokerage’s clients that could be carried over to another brokerage. For more information on conflict-of-interest disclosures, visit BCFSA’s Mortgage Services Knowledge Base.  

Principal Broker Considerations

Licensee Responsibilities  

If a licensee hires an unlicensed assistant, the licensee is responsible for ensuring that tasks assigned to the unlicensed assistant do not cross into activities that require a mortgage services licence. Having an employment contract with the brokerage that details what the unlicensed assistant is being hired to do can help protect brokerages and licensees, should potential concerns arise that an unlicensed assistant has been conducting mortgage services without a licence.

Confidentiality 

Licensees have a duty to maintain their client’s confidentiality while providing mortgage services. Given that unlicensed assistants may be privy to clients’ confidential information, it is prudent to provide this information in writing to a client. This ensures that clients are informed about the potential access unlicensed assistants may have to their confidential information in the course of their work as an unlicensed assistant.

Unlicensed Assistant and Personal Mortgage Corporations

A principal broker or mortgage broker who provides mortgage services through a personal mortgage corporation (PMC) must exercise direct control over the PMC and is referred to as the Controlling Individual. The only person permitted to provide mortgage services via a PMC is the Controlling Individual. However, a PMC may have employees who are not licensees, such as unlicensed assistants. For more information on PMCs, visit BCFSA’s Mortgage Services Knowledge Base. 

Applicable Section of Mortgage Services Act, its Regulations, or the Mortgage Services Rules

MSA

s. 3 [Requirement for licence to provide mortgage services]

MSA Regulations

s. 23 [Personal mortgage corporations] 
s. 25 [Licensing of personal mortgage corporation and its related controlling individual] 
s. 27 [Relationship between personal mortgage corporation and controlling individual]