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Information on mortgage lending licensing exemptions
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Accordion items
Introduction
The provision of mortgage services in B.C. is governed by the Mortgage Services Act (“MSA”), Mortgage Services Regulation (“Regulation”), and Mortgage Services Rules (“Rules”). The information below outlines the exemptions regarding licensure for the provision of mortgage lending for unlicensed individuals and mortgage brokers and principal brokers licensed under the MSA.
Section 39 of the Regulation provides that individuals, under specific circumstances, are exempt from licensing requirements under the MSA when providing the mortgage service of lending. Section 40 of the Regulations provides that licensed principal brokers and mortgage brokers, under specific circumstances, are exempt from acting on behalf of a mortgage brokerage when providing the mortgage service of lending. The below information provides the specifics of these circumstances.
Understanding lending exemptions
Requirement to be licensed
If a person provides the mortgage service of lending in B.C., or in relation to a property located in B.C., they are generally required to be licensed under the MSA, unless a licensing exemption applies.
Where a person is exempt under the Regulation from the mortgage lending licensing requirement, they may provide the service of lending without being licensed. In those circumstances, a licensed mortgage broker or principal broker may provide mortgage lending services to, or act on behalf of, their spouse in relation to that lending, as long as the lending activity falls within the scope of the exemption.
More information on licensing requirements can be found on BCFSA’s Mortgage Services Knowledge Base and the Mortgage Service Act: Licensing page.
Exemption for individuals
An individual is exempt from the requirements to be licensed to provide the mortgage service of mortgage lending, if the following conditions are met:
- the individual is lending their own money or the money of their spouse;
- the individual is not acting on behalf of anyone other than themselves or their spouse;
- the individual is not carrying on the business of providing the service of mortgage lending.
Exemption for Principal Brokers, Mortgage Brokers and Personal Mortgage Corporations
A licensed principal broker, mortgage broker or personal mortgage corporation is exempt from the licensing requirements to work under a brokerage when providing mortgage lending services if the following conditions are met:
- the licensee is lending their own money or the money of their spouse;
- the licensee is not acting on behalf of anyone other than themselves or their spouse;
- the licensee is not carrying on the business of providing mortgage lending services; and
- he licensee provides written disclosure to the principal broker of their brokerage that they are providing mortgage lending services, information on the real property securing the mortgage, the amount and term of the mortgage, and the identity of the borrowers of the mortgage loan.
Definitions
Spouse: is defined in the Rules as a person who is married to another person or is living with another person in a marriage-like relationship.
Applicable Section of the Mortgage Services Act, its Regulations, or the Mortgage Services Rules
MSA
s. 3(2)(a) [Requirement for licence to provide mortgage services]
s. 11(3) [Relationships between mortgage brokerages, principal brokers and mortgage brokers]
MSA Rules
s. 36 [Mortgage lending – acting for unlicensed persons prohibited]
s. 49 [Receiving money for mortgage lending – conditions]
s. 82 [Amount of payment to lender]
MSA Regulation
s. 39 [Exemption for individuals]
s. 40 [Exemption for principal brokers and mortgage brokers]