Mortgage brokerages must maintain a trust account of a type approved by the Superintendent in a financial institution that is authorized to receive money on deposit.
All trust money separate and apart from all other money belonging to the mortgage brokerage or those acting on its behalf.
Trust money must be deposited into a trust account and records kept of all transactions involving trust money received or held under this section.
Administration of trust money and trust accounts
Where a mortgage brokerage receives trust money with respect to a mortgage administered by the mortgage brokerage on behalf of a mortgage lender, the mortgage brokerage must pay the trust money to the mortgage lender within 30 days after receiving it. Interest earned on trust money shall be the property of the mortgage brokerage.
A mortgage brokerage must obtain prior approval of the Superintendent to open or maintain one or more trust accounts; move an existing trust account to another financial institution; and close a trust account.
A mortgage brokerage shall not:
- withdraw any money from a trust account that would result in a negative balance in an individual account in its trust ledger.
- withdraw money from the trust account where it is not in accordance with the trust agreement relating to that money.
- authorize a financial institution to deduct a service charge or any other charge from a trust account.
- pay a personal or office expense from a trust account.
Trust account records
A mortgage brokerage must keep records of the following:
- all trust money received and all transactions relating to the trust money.
- the unexpended balance of trust money held by the mortgage brokerage (i) in total, and (ii) separately for each person on whose behalf the trust money is held.
- a separate trust ledger for each person on whose behalf the mortgage brokerage holds trust money that shows the following in chronological order:
- all receipts of trust money and all disbursements from trust money on behalf of the person,
- for each receipt of trust money: the person from whom the trust money was received, the form or manner in which the trust money was received, and the purpose for which the trust money was received, including particulars of the mortgage to which the trust money relates.
- for each disbursement of trust money, the person to whom the money was disbursed, the cheque number or the confirmation number of the electronic transfer used to make the disbursement, and the purpose for the disbursement, including particulars of the mortgage to which the disbursement relates.
- the unexpended balance held on behalf of the person immediately after each receipt and disbursement.
- copies of a record of the deposit for each deposit to the trust account, all cheques with respect to the trust account, including cancelled cheques, all bank statements and banking records for the trust account, and any other documentary evidence of deposits and withdrawals with respect to the trust account.
Trust account reconciliation records
A mortgage brokerage shall prepare and keep monthly trust account reconciliation records that reconcile the trust records for each trust account administered by the mortgage brokerage.
A monthly trust account reconciliation record must be reviewed by an officer of the mortgage brokerage, who shall certify that it is accurate, sign it and date it.
The review of a monthly trust account reconciliation record shall not be performed by the same person who prepared the monthly trust account reconciliation record except where the mortgage brokerage that prepared the monthly trust account reconciliation record is a sole proprietorship.