BC Mortgage Broker exam
Criminal rate under Criminal Code - correct answer ✔✔Interest rate > 60% (What legislation?)
Prepayment privilege in the Interest Act - correct answer ✔✔Right of prepayment for an "individual" for
mortgage term over 5 years. Term includes any extensions unless date of mortgage changed to renewal
date (mutually agreed).
Vendor Take-Back Mortgage - correct answer ✔✔There is no restriction with private vendor financing
regarding loan to value
Disguised Mortgage - correct answer ✔✔Purpose of transaction (a transfer) is to offer property as
security; Transfer can regain title through the equity of redemption
Assumed mortgage under Property Law - correct answer ✔✔Limits vendor's (seller's) liabilities if (1)
residential purpose (2) lender's approval of purchaser in writing (3) transfer is within 3 months of
approval (4) lender's access to financial info of purchaser (5) mortgage is expired and no demand of
repayment is made within 3 months.
Equitable Mortgage (i.e. not a legal mortgage) - correct answer ✔✔By way of (1) handing over to lender
the duplicate certificate of title (2) agreement to grant an mortgage (3) disguising a mortgage as a
transfer
Section 3 of Interest Act - correct answer ✔✔If a document mentions interest but no rate is fixed in the
agreement or by law, the rate of interest is 5% p.a.
Section 8 of Interest Act - correct answer ✔✔Interest on arrears - a lender cannot charge a higher
interest on monies owning after default
Section 10 of Interest Act - correct answer ✔✔Right to prepay a mortgage (plus 3 month of interest): (1)
individual borrower; (2) mortgage not repayable until after 5 years; (3) 5 years expiration has passed
(unless the mortgage is renewed and date of mortgage changed to renewal date)
, Order absolute of foreclosure - correct answer ✔✔Lender can seek this relief if no equity in the
mortgaged property. If granted, the lender (1) become registered owner (2) vacant possession (3) equity
of redemption extinguished (4) personal covenant in the mortgage extinguished.
Section 6 & 7 of Interest Act - correct answer ✔✔For blended payments, S.6 requires statement of
interest rate calculated annually or semi-annually "not in advance". S.7 interest rate per statement of
interest rate is lower than repayment clause, the lower rate applies.
clogging - correct answer ✔✔A borrower cannot be prevented by the terms of the mortgage from
eventually redeeming his property
Collateral advantages - correct answer ✔✔Something other than the payment of interest
e.g.
1) Beer from the brewery
2) Petrol from one oil company
Void if it continues after redemption. If independently bargain, it may be valid after redemption.
Sales Clause - correct answer ✔✔Implication. Mortgage is not assumable. In the event that mortgagor
sells or agrees to sell or otherwise disposes of the said land, the full amount then owning of the principal
and interest secured hereby shall become due and forthwith, at the option of the mortgagee
Definition of Equitable Mortgage - correct answer ✔✔(1) mortgage of the equity of redemption (2)
Agreement to grant a mortgage (3) title deeds are given as security for a loan
Total Vaseline Received - correct answer ✔✔(1) Funds received by borrower under the mortgage loan (2)
payout or consolidation of any pre-existing loans (3) insurance premiums including fees for high-ratio
borrowing insurance.
Character - 5Cs of credit - correct answer ✔✔current employment situation, educational background,
business experience, length of time at current residence, etc.
Criminal rate under Criminal Code - correct answer ✔✔Interest rate > 60% (What legislation?)
Prepayment privilege in the Interest Act - correct answer ✔✔Right of prepayment for an "individual" for
mortgage term over 5 years. Term includes any extensions unless date of mortgage changed to renewal
date (mutually agreed).
Vendor Take-Back Mortgage - correct answer ✔✔There is no restriction with private vendor financing
regarding loan to value
Disguised Mortgage - correct answer ✔✔Purpose of transaction (a transfer) is to offer property as
security; Transfer can regain title through the equity of redemption
Assumed mortgage under Property Law - correct answer ✔✔Limits vendor's (seller's) liabilities if (1)
residential purpose (2) lender's approval of purchaser in writing (3) transfer is within 3 months of
approval (4) lender's access to financial info of purchaser (5) mortgage is expired and no demand of
repayment is made within 3 months.
Equitable Mortgage (i.e. not a legal mortgage) - correct answer ✔✔By way of (1) handing over to lender
the duplicate certificate of title (2) agreement to grant an mortgage (3) disguising a mortgage as a
transfer
Section 3 of Interest Act - correct answer ✔✔If a document mentions interest but no rate is fixed in the
agreement or by law, the rate of interest is 5% p.a.
Section 8 of Interest Act - correct answer ✔✔Interest on arrears - a lender cannot charge a higher
interest on monies owning after default
Section 10 of Interest Act - correct answer ✔✔Right to prepay a mortgage (plus 3 month of interest): (1)
individual borrower; (2) mortgage not repayable until after 5 years; (3) 5 years expiration has passed
(unless the mortgage is renewed and date of mortgage changed to renewal date)
, Order absolute of foreclosure - correct answer ✔✔Lender can seek this relief if no equity in the
mortgaged property. If granted, the lender (1) become registered owner (2) vacant possession (3) equity
of redemption extinguished (4) personal covenant in the mortgage extinguished.
Section 6 & 7 of Interest Act - correct answer ✔✔For blended payments, S.6 requires statement of
interest rate calculated annually or semi-annually "not in advance". S.7 interest rate per statement of
interest rate is lower than repayment clause, the lower rate applies.
clogging - correct answer ✔✔A borrower cannot be prevented by the terms of the mortgage from
eventually redeeming his property
Collateral advantages - correct answer ✔✔Something other than the payment of interest
e.g.
1) Beer from the brewery
2) Petrol from one oil company
Void if it continues after redemption. If independently bargain, it may be valid after redemption.
Sales Clause - correct answer ✔✔Implication. Mortgage is not assumable. In the event that mortgagor
sells or agrees to sell or otherwise disposes of the said land, the full amount then owning of the principal
and interest secured hereby shall become due and forthwith, at the option of the mortgagee
Definition of Equitable Mortgage - correct answer ✔✔(1) mortgage of the equity of redemption (2)
Agreement to grant a mortgage (3) title deeds are given as security for a loan
Total Vaseline Received - correct answer ✔✔(1) Funds received by borrower under the mortgage loan (2)
payout or consolidation of any pre-existing loans (3) insurance premiums including fees for high-ratio
borrowing insurance.
Character - 5Cs of credit - correct answer ✔✔current employment situation, educational background,
business experience, length of time at current residence, etc.
