A mortgage agent in Alberta receives an application from a self-employed borrower for a $600,000 mortgage on a new home in Calgary. The agent must verify the borrower's income. According to RECA regulations, which of the following is NOT an acceptable method for income verification in this scenario?

Question: A mortgage agent in Alberta receives an application from a self-employed borrower for a $600,000 mortgage on a new home in Calgary. The agent must verify the borrower's income. According to RECA regulations, which of the following is NOT an acceptable method for income verification in this scenario?

Answer options: ✅ Accepting a verbal statement from the borrower about their income without any supporting documentation.

• Obtaining Notice of Assessments (NOA) from the Canada Revenue Agency for the past two years.
• Requesting T1 Generals and financial statements prepared by a licensed accountant.
• Receiving a letter of employment and corresponding pay stubs (if applicable to a portion of income).

Correct answer: Accepting a verbal statement from the borrower about their income without any supporting documentation.

Explanation: RECA's Rules of Conduct and standard underwriting practices require robust verification of income. Verbal statements without documentation are insufficient and do not meet the due diligence requirements.