A mortgage brokerage receives a $10,000 deposit from a client for a specific mortgage application, to be held in trust until conditions are met. Which of the following is the correct procedure for handling these funds in Ontario?

Question: A mortgage brokerage receives a $10,000 deposit from a client for a specific mortgage application, to be held in trust until conditions are met. Which of the following is the correct procedure for handling these funds in Ontario?

Answer options: ✅ The funds must be deposited into a designated trust account, separate from the brokerage's operating account, in accordance with MBLAA.

• The funds can be deposited directly into the brokerage's operating account as long as they are tracked internally.
• The funds should be immediately transferred to the intended lender, even if conditions are not yet met.
• The funds can be held by the mortgage agent in a personal savings account until required.

Correct answer: The funds must be deposited into a designated trust account, separate from the brokerage's operating account, in accordance with MBLAA.

Explanation: Under the MBLAA and O. Reg 187/08, a mortgage brokerage must maintain a separate trust account for all funds received from clients as deposits or for disbursement, ensuring segregation from operating funds.