Mortgage Brokerage in British Columbia Manual
Table of Contents
UBC Real Estate Division. 2023. Mortgage Brokerage in British Columbia - Course Manual. Vancouver, BC: UBC Real Estate Division.
Preface: Introduction to Real Estate and Mortgage Brokerage
Land Ownership
Land Value
Real Property Law
Key Participants in the Mortgage Brokerage Market
Residential and Industrial, Commercial and Investment (IC&I) Real Estate Markets
Characteristics of Real Property
Organization of the Real Estate and Mortgage Brokerage Industry in British Columbia
Chapter 1: Fundamentals of Law
The Sources of Our Laws
Categories Within Our Legal System
Real Property Law
The Judicial System in Practice: The British Columbia Court System
Chapter 2: The Mortgage Brokers Act and Professional Ethics
The Registration Body – The Registrar of Mortgage Brokers for the Province of British Columbia
The Registration System
The Registrar’s Powers of Investigation
Powers of Disciplinary Action
Mortgage Broker Market Conduct
Conflict of Interest Disclosure to Borrowers and Lenders – Form 10
Ethics
What Are Professional Ethics?
Why Study Professional Ethics?
Professionalism
Duty to Uphold the Law
Duty to Client in Providing Mortgage Services
Enforcement of Professional Ethics
Appendix 2.1: Sample Disciplinary Decision of the Registrar of Mortgage Brokers
Appendix 2.2: Form 9 – Lender Disclosure Statement
Appendix 2.3: Form 10 – Conflict of Interest Disclosure Statement
Appendix 2.4: Code of Ethics and Standards of Professional Conduct Canadian Mortgage Brokers Association –
British Columbia (CMBA-BC)
Chapter 3: What the Purchaser Buys: Estates and Interests in Land
The Evolution of Real Property Law and the Doctrine of Estates
Fee Simple Estate
Life Estate and Estate Pur Autre Vie
Leasehold Estates
Interests in Land Less Than Estates
The Extent of “Ownership” in Land
Co-Ownership of Land
Introduction to Tort Law
Trespass
Private Nuisance
Liability of an Occupier
Chapter 4: Title Registration and Strata Properties in British Columbia
Who Owns the Land?
How is Land Divided?
Title Registration in British Columbia
The Torrens System of Land Registration
Land Title Offices, Searching Title and the Registration Process
Title Insurance
Contaminated Sites
First Nations Land Registration
Strata Properties (Condominiums) and Cooperatives in British Columbia
Appendix 4.1: Sample Land Title Search
Appendix 4.2: Sample Excerpts From Strata Plans – Sample Strata Plan: Ground Floor
Chapter 5: The Professional Liability of Mortgage Brokers
Negligence
Misrepresentations and Deceit
Errors in Drafting Agreements
Breach of Fiduciary Duty
Statutory and Industry Liability
What is the Bottom Line?
Mortgage Fraud
The Competition Act
Fiduciary and Agency Relationships of Mortgage Brokers
Common Law Fiduciary Duties
The Duty of Confidentiality
The Duties of the Principal to the Agent
Relationship Between the Agent and the Third Party
Money Laundering and Terrorist Financing
Chapter 6: The Law of Contract
Void, Illegal, Voidable and Unenforceable Contracts
Offer
Acceptance
Consideration
Legal Intention
Capacity
Legal Object
Genuine Consent
Termination of a Contract
Remedies
Chapter 7: Introduction to Mortgage Law
Introduction to Mortgage Law
Legal and Equitable Mortgages
Implied Terms of a Mortgage
Express Terms of a Mortgage
Special Types of Mortgages
Federal Legislation over Mortgages
Provincial Legislation over Mortgages
Assignment of the Mortgage
Assumption of the Mortgage
Novation
Priorities
Further Advances
The Foreclosure Process in British Columbia
Agreements for Sale
Appendix 7.1: Land Title Act Form B
Chapter 8: Financial Statements
Forms of Organization
Financial Reporting
Generally Accepted Accounting Principles (GAAP)
Financial Statements
Income Tax Return
Analyzing Financial Statements
Chapter 9: Introduction to Mortgage Finance
Role of Financing in Real Estate Transactions
Capital Market
Characteristics of Mortgage Loans as Investments
Development of Contemporary Mortgage Lending
Classification of Mortgage Loans
Selling Mortgage Life Insurance
Mortgage Repayment Plans
Mortgage Interest Rates and the Federal Interest Act
Using the HP 10bII+ Calculator in this Course
Basis of Interest Calculations
Future Value and Present Value of Lump Sums
Annuities: Payments
Calculating Interest Only Payments
Chapter 10: Interest Rates and Mortgages
Equivalent Interest Rates
Application of Equivalent Rates to Periodic Payments
Analysis of Constant Payment Mortgages
Chapter 11: Mortgage Analysis in Real Estate Practice
Impact of Financing on Real Estate Transactions
Portable Mortgages
Impact of Brokerage and Other Fees
Chapter 12: Mortgage Underwriting and Borrower Qualification
Residential (Owner-Occupied) Mortgage Underwriting
Commercial Mortgage Loan Underwriting
Chapter 13: Management of Individual Loans
Financial Covenants of the Borrower
Loan Administration and Management
Arrears and Default
Chapter 14: Mortgage Loan Repayment and Refinancing Options
Variable Rate Mortgages (VRMs)
Graduated Payment Mortgages (GPMs)
Sinking Fund Assisted Mortgages (SFAMs)
Reverse Mortgages or Reverse Annuity Mortgages (RAMs)
Refinancing the Property
Wrap-Around Mortgages
Chapter 15: Introduction to Real Estate Appraisal
The Appraisal Process
Step 1: Defining the Appraisal Problem
Step 2: Scope of Work Determination
Step 3: Data Collection
Step 4: Data Analysis
Step 5: Selection of the Appropriate Appraisal Approach
Step 6: Reconciliation of Value Indications and Final Opinion of Value
Step 7: Communicate Findings
Legal Considerations for Appraisal
Looking Ahead – Innovations in Property Valuation
Chapter 16: Direct Comparison (Comparative) and Cost Approaches of Appraisal
Purpose of the Appraisal
Direct Comparison (Comparative) or Market Approach
Analysis of Market Transactions
Adjustments for Value
Case Study 1
Further Applications of the Comparative Approach
Scope and Limitations of the Comparative Approach
The Comparative Approach and the Comparative Market Analysis
The Cost Approach
Determining Market Value by the Cost Approach
Depreciation
Scope and Limitations of the Cost Approach
Appendix 16.1: Calculations Used to Find Market Value of a Vendor Take-back
Appendix 16.2: Sample Construction Costs of a Single Family Residence
Appendix 16.3: Sample Comparative Market Analysis (CMA)
Chapter 17: The Income or Investment Approach of Appraisal
Establishing Net Operating Income
Required Rate of Return
Capitalization Process: Market Value
Case Study 1
Case Study 2
Chapter 18: Introduction to Marketing and Technology
Marketing Concept
Marketing Theory
Integrated Marketing
Advertising
Other Types of Marketing
Measuring the Effectiveness of Advertising and Marketing
Technological Tools for Mortgage Brokers
Chapter 19: Effective Negotiations and Alternative Dispute Resolution
The Nature of Effective Negotiations
Negotiation Approaches
When Negotiations Fail
Chapter 20: From Contract to Completion
The Contract of Purchase and Sale
Closing Procedures
General Introduction to Statements of Adjustments
Items on Statements
Preparing Statements of Adjustments
Appendix 20.1: Building Location Survey
Appendix 20.2: Statements of Adjustments
Chapter 21: Mortgage Brokering: Blending Theory and Practice
Initial Client Interview
Mortgage Option Recommendations
Taking the Mortgage Application
Obtaining the Credit Report
Reviewing Paperwork
Submitting the Application
Fulfillment
Instructions and Closing
Administration
Glossary
Index