Mortgage Broker Licensing Practice Exam · Question
Michael, an agent working under an Alberta-licensed mortgage broker, is approached by a client seeking a mortgage for a property where the client intends to run a small home-based business. The client has limited savings and a high debt-to-income ratio. What is Michael's primary obligation under RECA's Rules of Conduct?
RECA's Rules of Conduct require mortgage brokers and agents to act in the best interests of the client by diligently assessing their needs and circumstances to
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Question: Michael, an agent working under an Alberta-licensed mortgage broker, is approached by a client seeking a mortgage for a property where the client intends to run a small home-based business. The client has limited savings and a high debt-to-income ratio. What is Michael's primary obligation under RECA's Rules of Conduct?
Answer options: ✅ To assess the client's financial circumstances, needs, and objectives to recommend a suitable mortgage product.
- To only recommend lenders who offer immediate approval for clients with high debt-to-income ratios.
- To advise the client to sell their existing assets to improve their financial position.
- To guarantee the client a mortgage regardless of their financial situation.
Correct answer: To assess the client's financial circumstances, needs, and objectives to recommend a suitable mortgage product.
Explanation: RECA's Rules of Conduct require mortgage brokers and agents to act in the best interests of the client by diligently assessing their needs and circumstances to recommend suitable mortgage products.
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Related Questions
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Question explanations
- What is the typical time frame for a mortgage agent to provide the required disclosure statement to a client?
- Funds received from a client or investor that the brokerage holds on their behalf must be deposited into:
- Ontario mortgage agents must complete which of the following at each licence renewal?
- Which entity is responsible for licensing and regulating mortgage brokers and agents in Ontario?
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