CNLR 1006/96 - Mortgage Brokers Regulations under the Mortgage Brokers Act

CONSOLIDATED NEWFOUNDLAND AND LABRADOR REGULATION 1006/96 Mortgage Brokers Regulations under the Mortgage Brokers Act (O.C. 96-294) Amended by: 58/97 SNL2008 cC-37.0001 s49 (not in force therefore not included here) 2009 cC-31.1 s111 CONSOLIDATED NEWFOUNDLAND AND LABRADOR REGULATION 1006/96 Mortgage Brokers Regulations under the Mortgage Brokers Act (O.C. 96-294) Under the authority of section 13 of the Mortgage Brokers Act and the Subordinate Legislation Revision and Consolidation Act , the Lieutenant-Governor in Council makes the following regulations. REGULATIONS Analysis 1. Short title 2. Definitions 3. Application 4. Rep. by 2009 cC-31.1 s111 5. Bonus 6. Registration exemptions 7. "Actual amount" defined 8. Rate calculation described 9. Advertisements 10. Repeal Short title 1. These regulations may be cited as the Mortgage Brokers Regulations . 119/78 s1 Back to Top Definitions 2. In this regulations (a) "Act" means the Mortgage Brokers Act ; and (b) "securities underwriters" means a person, firm or company who has purchased from an issuer of a security, as the term "security" is defined in the Securities Act , the right to sell all or a part of that security or who sells the security for an issuer of it or who participates or who has a direct or indirect participation in the undertaking or is otherwise interested in the sale of the security of an issuer of it and includes a person, firm or company who acts as an agent of an issuer in the sale, placement, solicitation or other disposition of the security. Back to Top Application 3. (1) An application for registration as a mortgage broker shall be made to the registrar (a) where the applicant is a partnership or corporation in the form prescribed by the minister; or (b) where the applicant is a sole proprietor in the form prescribed by the minister. (2) A registration remains in effect subject to the filing of annual reports and payments of an annual fee as prescribed by the minister until it is withdrawn by the registered person or is suspended or cancelled under the Act. (3) A certificate of registration shall be in the form prescribed by the minister. 119/78 s3; 131/93 s1; 58/97 s1 Back to Top Rep. by 2009 cC-31.1 s111 4. [Rep. by 2009 cC-31.1 s111] 2009 cC-31.1 s111 Back to Top Bonus 5. (1) A mortgage broker and mortgage lender shall not charge a bonus in excess of 1% of the principal amount of a mortgage plus $100. (2) In these regulations, "bonus" shall not include an application fee charged by a mortgage lender. 133/87 s2 Back to Top Registration exemptions 6. The following shall be exempt from the registration provisions of the Act: (a) a lawyer acting in the ordinary course of his or her profession; (b) a real estate agent, licensed under the Real Estate Trading Act , acting in the ordinary course of his or her business; (c) a mortgage broker receiving less than $1,000 annually from the business of mortgage brokering; and (d) a securities underwriter. 119/78 s6; 133/87 s3 Back to Top "Actual amount" defined 7. For the purpose of paragraph 8(a) of the Act, the term "actual amount" shall have the following meaning: (a) in the case of non-revolving credit, the amount of money to be paid to the borrower or to be disbursed on his or her direction; (b) in the case of revolving credit, the maximum amount of money approved to be paid to the borrower or to be disbursed on his or her direction during the term of the agreement. 133/87 s4 Back to Top Rate calculation described 8. The maximum annual effective rate of interest used in a disclosure statement established under section 4 shall be calculated as follows: assume a mortgage with a face value of $20,000 at an interest rate of 10% for a 5 year term the interest charge per year is $2,000 assume a bonus of $200 divide the bonus by 5 = $40 the average annual cost is $2,040 the maximum annual effective rate of interest is: the average annual cost x 100 the actual proceeds of the mortgage = the maximum annual effective rate of interest or $2,040 x 100 $19,800 = 10.3% 119/78 s7 Back to Top Advertisements 9. A mortgage broker shall, when advertising, indicate that he or she is a mortgage broker and the address of his or her place of business. 119/78 s7A Back to Top Repeal 10. The Mortgage Brokers Regulations (No. 1), 1976, Newfoundland Regulation 119/78, are repealed. ©Earl G. Tucker, Queen's Printer