A Level 2 Mortgage Agent, working under a brokerage, discovers that a potential borrower has deliberately misrepresented their income on an application. The borrower insists the agent proceed with the application, stating it's a minor exaggeration and common practice. What is the agent's primary and most appropriate course of action under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) and its regulations?

Question: A Level 2 Mortgage Agent, working under a brokerage, discovers that a potential borrower has deliberately misrepresented their income on an application. The borrower insists the agent proceed with the application, stating it's a minor exaggeration and common practice. What is the agent's primary and most appropriate course of action under the Mortgage Brokerages, Lenders and Administrators Act, 2006 (MBLAA) and its regulations?

Answer options: ✅ Advise the borrower to correct the income, documenting the advice; if the borrower refuses to correct, decline to proceed with the application and report the incident to the principal broker.

• Proceed with the application but include a disclaimer in the file noting the borrower's statement and obtain written acknowledgement from the principal broker.
• Proceed with the application, ensuring all other details are accurate, as the lender is ultimately responsible for verifying income.
• Inform the borrower that misrepresentation is illegal, but continue with the application using the misrepresented income if the borrower assumes all liability.

Correct answer: Advise the borrower to correct the income, documenting the advice; if the borrower refuses to correct, decline to proceed with the application and report the incident to the principal broker.

Explanation: Mortgage agents have a duty to deal fairly, honestly, and with integrity. MBLAA O. Reg 187/08, Section 4 (Rules of Conduct) explicitly prohibits agents from making false or misleading statements or omitting material facts. The agent must decline to participate in any dishonest activity and report it to their principal broker.