A broker in Quebec, Anne, is arranging a private mortgage for a borrower, Jean-Luc, who needs $250,000 for a short-term bridge loan. The private lender, 'Capital Partners Inc.', charges a 2% lender fee and the broker is charging a 1.5% broker fee. Both fees are to be deducted from the advance. What is an immediate requirement Anne must fulfill regarding these fees?

Question: A broker in Quebec, Anne, is arranging a private mortgage for a borrower, Jean-Luc, who needs $250,000 for a short-term bridge loan. The private lender, 'Capital Partners Inc.', charges a 2% lender fee and the broker is charging a 1.5% broker fee. Both fees are to be deducted from the advance. What is an immediate requirement Anne must fulfill regarding these fees?

Answer options: ✅ Ensure full disclosure of all costs of borrowing, including both lender and broker fees, to Jean-Luc before he commits to the mortgage.

• Obtain Jean-Luc's verbal agreement for the fees, as written consent is only required for insured mortgages.
• Waive her broker fee if the lender fee exceeds 1.5% of the loan amount.
• Submit the lender fee directly to FINTRAC as a large cash transaction report.

Correct answer: Ensure full disclosure of all costs of borrowing, including both lender and broker fees, to Jean-Luc before he commits to the mortgage.

Explanation: Mortgage brokers have a suitability and disclosure obligation to ensure all costs of borrowing, including lender and broker fees, are transparently disclosed to the borrower before they commit. This is a core regulatory requirement in all Canadian jurisdictions, rooted in consumer protection principles.