A mortgage broker is approached by Mr. Chen who requires a mortgage. The broker's spouse works as a senior underwriter at 'Prime Mortgage Corp.', a specific lender that the broker frequently uses. Although the spouse is not directly involved in Mr. Chen's application, the professional relationship creates a potential for conflict. What is the MOST appropriate action for the broker to take?

Question: A mortgage broker is approached by Mr. Chen who requires a mortgage. The broker's spouse works as a senior underwriter at 'Prime Mortgage Corp.', a specific lender that the broker frequently uses. Although the spouse is not directly involved in Mr. Chen's application, the professional relationship creates a potential for conflict. What is the MOST appropriate action for the broker to take?

Answer options: ✅ Disclose the spouse's employment to Mr. Chen in writing and document that Mr. Chen acknowledges this disclosure, offering alternative lenders.

• Avoid placing Mr. Chen's mortgage with Prime Mortgage Corp. altogether to eliminate any perceived conflict.
• Only disclose the relationship if Mr. Chen asks about potential connections to the lender.
• Proceed with placing the mortgage with Prime Mortgage Corp. as long as the spouse is not directly handling the file.

Correct answer: Disclose the spouse's employment to Mr. Chen in writing and document that Mr. Chen acknowledges this disclosure, offering alternative lenders.

Explanation: A familial relationship with a lender's employee creates a potential for conflict of interest. The broker must disclose this relationship in writing to the client, allowing the client to make an informed decision, and offer other options. This mitigates the conflict while maintaining transparency, as required by provincial regulations.