A recent bill in the US, responding to the shaky housing market there, has focused on mortgage brokers and the mortgage industry. It is establishing new regulations and accountability for mortgage professionals, requiring background checks, testing, registration and annual continuing education courses.

Canadians seeing this might be wondering what regulations are in place to govern Canadian mortgage brokers. While there is a bit of a mixed bag, this article attempts to sort it all out.

Provincial Regulations

A recent Calgary Herald article noted that in some provinces there is no licensing of mortgage brokers, while others have strict licensing requirements.

At one end of the scale are some of the larger provinces: Alberta requires brokers to take a course to earn a license before setting up shop; Ontario enacted a law in mid-2008 that requires brokers to have a license based on standards laid out by the Financial Services Commission of Ontario; British Columbia has licensing standards for its mortgage brokers, as does Saskatchewan.

In an example of the other extreme in licensing, Nova Scotia was asked as recently as June 2008 to tighten its regulation of mortgage brokers.

The Canadian Association of Accredited Mortgage Professionals (CAAMP) was behind the recommendation to the Nova Scotia government. The CAAMP offers an Accredited Mortgage Professional (AMP) designation that acts as a proficiency standard for mortgage brokers in Canada. Notwithstanding any provincial licensing requirements, the AMP designation aims to standardize mortgage professionals at a national level. In the words of the CAAMP, the AMP:

“Sets a single national proficiency standard for mortgage professionals; [w]as introduced…to enhance the level of professionalism in the mortgage industry; [and] demonstrates commitment to ongoing education and ethical behaviour…”

To earn the AMP designation, mortgage professionals must have specified levels of experience in the mortgage industry, based on the association's Two Year Rule or Five Year Rule.

The Two Year Rule requires a minimum of two years' work experience and completion of the CAAMP exam or equivalent proficiency test. The Five Year Rule requires fives years of work experience and recommendation letters from two AMP-certified professionals.

The AMP designation also requires completion of the CAAMP's pre-accreditation course, which covers ethics and responsibilities for mortgage professionals.

Like many professional designations, holders of the AMP must work to maintain their accreditation. They are required to operate at all times by the association's stringent code of ethics and they must complete a minimum of ten hours of continuing education credits each year.

Choosing a Mortgage Broker

Buying a home,looking for a mortgage, getting the right legal advice can be a harrowing experience.A mortgage broker can solve all of these issues in a a one stop shop solution. So, choosing a professional mortgage broker should be the first thing on your list before you sar house hunting.

If you live in a province that does not require licensing of its mortgage brokers, you would be wise to look for other certifications, like the AMP, to ensure that you have selected a broker who follows strict professional standards.