File Audits and Deficiencies

Please review all files very carefully before sending them in for payment. It takes a lot of time for both you and Head Office to audit and correct files. Below is a list of the most common errors.
All sub agents should be forwarding their files to the senior broker for approval before sending them into head office for payment.
 
Click on Disclosure to Borrower entry screen in Filogix

Cost of Borrowing 1st page

If there is no grace period with respect to when interest begins then please leave this box blank

“Where the actual interest rate may change… “- this is in respect to Variable mortgages and you would put in the details of the product. See below for appropriate descriptions

Terms and Conditions: These are all defaulted to” Refer to the commitment for complete details”. Please add anything that is unusual on the approval. For example: tax hold backs, cash backs, holdback of funds, etc.

Nature, Amount and Timing of Optional Services: This includes life insurance, ELV, Home Warranty Plans, etc.

Conflict of Interest 2nd page

• Conflicts of Interest -describe any conflicting relationship if it applies to your deal. For example, you’re related to the lender
• Mortgage Commission – tick the box
• Bonus (really means Volume Bonus) – tick the box
• Other Compensation (means points, mcap bucks, etc) – tick the box
• Referral – No referral Fee paid or Referral – Referral Fee paid tick the boxes if either applies to your deal. If they don’t apply then leave them blank. If you have ticked that a referral fee will be paid then you must include the name of the person or company that is receiving the referral fee
• The Broker is representing Both the Lender and the Borrower … (changed from Lender)
• The brokerage has placed over 50%... leave this blank as it does not apply
• The brokerage has acted for 35 lenders during the previous fiscal year
• RMA has not acted as a lender in the previous fiscal year
• After all the information is entered then it will download onto the Disclosure Form. Please PRINT COMBINATION as this melds the 2 forms into one document.
  

 Variable Rate Mortgages

here are 2 examples of the descriptions that need to be included in on the disclosure where the mortgage is a Variable Rate Mortgage

• TD and Desjardins do not automatically adjust the mortgage payment as the Prime rate changes. The description should read something like this:VRM, Prime +.60, compounding monthly, lender will not change the mortgage payment as Prime changes, therefore, negative amortization may occur.
• You will need to adjust the percentage rate and compounding to match the commitment

Scenario 2 – for all other A lenders:

• VRM, Prime +.60, compounding semi annually, lender will change the mortgage payment as Prime changes.
• You will need to adjust the percentage rate and compounding to match the commitment

Step, Matrix, AIO, LOC, HELOC Mortgages and the like

Complete the file as if it was a fixed mortgage using the total mortgage amount. The only difference is that in the disclosure you will enter the line of credit portion (as if you were doing a vrm)

The description for the vrm portion on the disclosure will read something like this:
STEP mortgage, 50K in a secured line, calculated monthly based on the prime rate, not amortized, interest only payments

Matrix mortgage, 25K in a LOC, calculated monthly based on the prime rate, not amortized, interest only payments

AIO Mortgage, 10k in a LOC, calculated monthly based on the prime rate, not amortized, interest only payments

LOC and/or HELOC, 75K in a LOC and/or HELOC, calculated monthly based on the prime rate, not amortized, interest only payments


General Rules for the disclosure form

CMHC

• If CMHC and sales tax charged, then remember to add the amounts to the fees section of the disclosure
• CMHC and sales tax are NOT to be included in APR (unless it’s an insured conventional mortgage)
• If the lender is paying the cmhc and tax then please make a note of this in the terms and conditions section of the disclosure

Fees Section – what to include

• Lender fees are to be entered in the fee section of the disclosure and included in APR
• Estimated legal fees and disbursements are to be listed in the fees section of the disclosure and included in APR
• Any cost associated with the mortgage needs to be listed in the fees section and included in APR. For example: appraisals, home inspections, estimated legal fees, lender fees, broker fees, etc.

Terms and Conditions Section – what to include

• Tax holdbacks are to be listed in the Terms and Conditions section of the disclosure
• Cash back amounts are to be listed in the Terms and Conditions section of the disclosure
• Any funds held back at closing by the lender must be recorded in the Terms and Conditions section of the disclosure
• Any penalties for breaking a mortgage can be listed in the Terms and Conditions section of the disclosure
• CMHC and tax charged by the lender AND paid  by the lender
• ELV’s must have an appropriate description. i.e. ELV, interest only monthly payments based on 1.5% of outstanding monthly balance, no amortization
• Lines of Credit must have an appropriate description. i.e. LOC, interest only monthly payments, no amortization

Form 1
All  Private  Investor Disclosures (FORM 1) must be received at  head office for Broker of Record’s signature before going to the Investor 2 days prior to the Investor committing to fund such mortgage.
Failure to do this will result in no commissions payable Commissions/Broker Fees to you as an  agent or broker, no exceptions will be made.
Please email them to maryannlegato@rmabroker.ca or fax them to 1-888-482-3536

Insurance
Make sure the clients initial at the top of the form to waive or accept. Please also make sure they sign and date at the bottom of the form.

Client Suitability Form
Must be signed and dated by all clients on the application

Photo Identification
Mortgage brokerages must take steps to verify the identity of the borrower and lender that you do business with. Acceptable photo ID is the following:

1. Driver’s license
2. Passport
3. Citizenship Card
   

Please note: In addition to the picture, the ID must show the client’s signature. This may mean that in some cases you will need to take multiple photocopies of the ID. FSCO indicates that a Health card (OHIP card) is NOT acceptable. Amelia McLeod and Elaine Carter have passed along a good suggestion. At the time of your client meeting have a digital camera available. Take pictures of the client’s ID and signatures for the greatest clarity.

If Photo id is not available then the clients must provide you with a signed affidavit from the lawyer confirming identity