FSRA releases final Guidance to help ensure
the fair treatment of consumers
TORONTO, June 19,
2024 /CNW/ - Ontario's financial services
regulator (FSRA) is taking steps to ensure borrowers and investors
receive mortgage products that suit them and meet their needs and
circumstances.
FSRA is releasing final Guidance to help licensed mortgage
professionals better understand their regulatory duties to promote
fair treatment of consumers, conduct business appropriately and
increase public confidence in the sector. This initiative will
protect consumers and investors by enhancing standards around
product suitability, whether they are looking for mortgage
financing or investing.
"For most people, getting a mortgage is the biggest financial
decision they will make in their lifetime, and we want to ensure
their mortgage professional is giving them the best advice
possible," said Huston Loke, Executive Vice President, Market
Conduct at FSRA. "Our final Guidance sets out our expectations so
that a consumer's needs and circumstances are well understood
before a mortgage option is recommended to them."
FSRA developed the Guidance in anticipation of consumers
increasingly relying on mortgage advice due to fluctuating interest
rates and reduced mortgage affordability. Moreover, a review of
private mortgages arranged by mortgage professionals in the last
few years found that most transactions did not clearly show how the
mortgage products were deemed suitable for
consumers.
FSRA has set out the following outcomes so that:
- Mortgage professionals know their clients.
- Mortgage professionals know their products.
- Mortgage options meet client needs.
- Clients understand the recommended products.
- Mortgage products are suitable.
- Product recommendations are properly documented.
The Guidance reflects stakeholder input and clarifies that
suitability assessment applies to mortgage renewals and appraisals
should be conducted by designated / certified appraisers. Updates
to Forms 1 and 2 enhance clarity, consumer-friendliness, and
transparency about investment risks.
As always, mortgage professionals must put clients' interests
first and ensure they are complying with their licensing
obligations and requirements.
Learn more:
- Final Guidance: Mortgage Product Suitability Assessment
- Consultation feedback summary
- Revised Form 1 and Form 2
- Mortgage Broker Regulators' Council of Canada's Principles for Mortgage Suitability
Assessments
FOR MEDIA INQUIRIES:
Russ Courtney
Sr. Manager of Media Relations
Financial Services Regulatory Authority
C: 437-225-8551
Email: russ.courtney@fsrao.ca
SOURCE Financial Services Regulatory Authority of Ontario