RECA Fundamentals of Mortgage Brokerage Exam Practice Test Bank
| Alberta Real Estate Council Verified Questions & Case Rationales
Graded A+
Pass your official Alberta licensing exam on the very first attempt with this
comprehensive RECA Fundamentals of Mortgage Brokerage practice test bank.
Master critical provincial industry domains, including the Real Estate Act of Alberta,
mortgage underwriting math, land titles registration analysis, contract law
provisions, and ethical professional conduct standards. Every verified practice
question features a highly detailed legal and financial rationale to sharpen your client
assessment precision, eliminate test anxiety, and secure your professional brokerage
license.
SECTION 1: RECA REGULATORY FRAMEWORK & LICENSING
(Questions 1–30)
Question 1: Which body is responsible for administering the Real Estate Act and
regulating mortgage brokerages in Alberta?
A) The Alberta Mortgage Brokers Association (AMBA)
B) The Real Estate Council of Alberta (RECA)
C) The Service Alberta Consumer Protection Division
D) The Canada Mortgage and Housing Corporation (CMHC)
Answer: B) The Real Estate Council of Alberta (RECA)
Rationale: RECA is the independent, non-government governing body that sets and
enforces standards for mortgage brokerage, real estate, and property management
professionals in Alberta .
,Question 2: What is the primary purpose of the Real Estate Act in Alberta?
A) To set competitive mortgage interest rates for consumers
B) To protect the public interest and govern the industry
C) To provide government-backed mortgage insurance
D) To handle land registration and title transfers
Answer: B) To protect the public interest and govern the industry
Rationale: The legislation is fundamentally consumer-protection law designed to ensure
industry professionals act with integrity, competence, and transparency .
Question 3: Which entity has the authority to amend the Real Estate Act?
A) The Minister of Finance
B) The Executive Director
C) The Provincial Legislature
D) The Council
Answer: C) The Provincial Legislature
Rationale: The Provincial Legislature has the authority to amend the Real Estate Act. RECA
administers the Act but does not have the power to amend it .
Question 4: What is the maximum administrative penalty per breach for an individual
practicing as a mortgage associate without a license in Alberta?
A) $5,000
B) $10,000
C) $25,000
D) $50,000
Answer: C) $25,000
,Rationale: Under the Real Estate Act, RECA can issue administrative penalties of up to
$25,000 per violation for individuals practicing without a license or violating the rules .
Question 5: What is the length of time a license is valid for if NOT registered with a
brokerage?
A) 12 months
B) 24 months
C) 36 months
D) 48 months
Answer: C) 36 months
Rationale: A license is valid for 36 months if not registered with a brokerage .
Question 6: Within how many days must a licensed mortgage associate notify RECA of
a legal name change?
A) 7 days
B) 14 days
C) 30 days
D) 60 days
Answer: B) 14 days
Rationale: Licensees are required to update RECA regarding any changes to their personal
information, including legal name changes or contact info, within 14 days .
Question 7: What is the role of the Real Estate Insurance Exchange (REIX)?
A) To provide Errors & Omissions insurance for real estate and mortgage professionals
B) To provide health insurance
, C) To provide life insurance
D) To provide property insurance
Answer: A) To provide Errors & Omissions insurance for real estate and mortgage
professionals
Rationale: REIX provides financial protection through mandatory errors & omissions
insurance and negligence coverage, compensating consumers up to $35,000 .
Question 8: What is the first deductible amount for a REIX claim?
A) $1,500
B) $2,500
C) $3,500
D) $5,000
Answer: C) $3,500
Rationale: The first deductible for a REIX claim is $3,500; $7,000 for a second claim .
Question 9: What is the primary purpose of RECA's trust assurance and practice review
program?
A) To increase broker profits
B) To ensure effective record-keeping, administrative procedures, and trust accounting
compliance
C) To provide marketing advice
D) To set interest rates
Answer: B) To ensure effective record-keeping, administrative procedures, and
trust accounting compliance
Rationale: The trust assurance and practice review program ensures effective record-
keeping and administrative procedures, provides education and advice on brokerage trust
accounting, and identifies and resolves potential problems regarding trust accounting
requirements .
| Alberta Real Estate Council Verified Questions & Case Rationales
Graded A+
Pass your official Alberta licensing exam on the very first attempt with this
comprehensive RECA Fundamentals of Mortgage Brokerage practice test bank.
Master critical provincial industry domains, including the Real Estate Act of Alberta,
mortgage underwriting math, land titles registration analysis, contract law
provisions, and ethical professional conduct standards. Every verified practice
question features a highly detailed legal and financial rationale to sharpen your client
assessment precision, eliminate test anxiety, and secure your professional brokerage
license.
SECTION 1: RECA REGULATORY FRAMEWORK & LICENSING
(Questions 1–30)
Question 1: Which body is responsible for administering the Real Estate Act and
regulating mortgage brokerages in Alberta?
A) The Alberta Mortgage Brokers Association (AMBA)
B) The Real Estate Council of Alberta (RECA)
C) The Service Alberta Consumer Protection Division
D) The Canada Mortgage and Housing Corporation (CMHC)
Answer: B) The Real Estate Council of Alberta (RECA)
Rationale: RECA is the independent, non-government governing body that sets and
enforces standards for mortgage brokerage, real estate, and property management
professionals in Alberta .
,Question 2: What is the primary purpose of the Real Estate Act in Alberta?
A) To set competitive mortgage interest rates for consumers
B) To protect the public interest and govern the industry
C) To provide government-backed mortgage insurance
D) To handle land registration and title transfers
Answer: B) To protect the public interest and govern the industry
Rationale: The legislation is fundamentally consumer-protection law designed to ensure
industry professionals act with integrity, competence, and transparency .
Question 3: Which entity has the authority to amend the Real Estate Act?
A) The Minister of Finance
B) The Executive Director
C) The Provincial Legislature
D) The Council
Answer: C) The Provincial Legislature
Rationale: The Provincial Legislature has the authority to amend the Real Estate Act. RECA
administers the Act but does not have the power to amend it .
Question 4: What is the maximum administrative penalty per breach for an individual
practicing as a mortgage associate without a license in Alberta?
A) $5,000
B) $10,000
C) $25,000
D) $50,000
Answer: C) $25,000
,Rationale: Under the Real Estate Act, RECA can issue administrative penalties of up to
$25,000 per violation for individuals practicing without a license or violating the rules .
Question 5: What is the length of time a license is valid for if NOT registered with a
brokerage?
A) 12 months
B) 24 months
C) 36 months
D) 48 months
Answer: C) 36 months
Rationale: A license is valid for 36 months if not registered with a brokerage .
Question 6: Within how many days must a licensed mortgage associate notify RECA of
a legal name change?
A) 7 days
B) 14 days
C) 30 days
D) 60 days
Answer: B) 14 days
Rationale: Licensees are required to update RECA regarding any changes to their personal
information, including legal name changes or contact info, within 14 days .
Question 7: What is the role of the Real Estate Insurance Exchange (REIX)?
A) To provide Errors & Omissions insurance for real estate and mortgage professionals
B) To provide health insurance
, C) To provide life insurance
D) To provide property insurance
Answer: A) To provide Errors & Omissions insurance for real estate and mortgage
professionals
Rationale: REIX provides financial protection through mandatory errors & omissions
insurance and negligence coverage, compensating consumers up to $35,000 .
Question 8: What is the first deductible amount for a REIX claim?
A) $1,500
B) $2,500
C) $3,500
D) $5,000
Answer: C) $3,500
Rationale: The first deductible for a REIX claim is $3,500; $7,000 for a second claim .
Question 9: What is the primary purpose of RECA's trust assurance and practice review
program?
A) To increase broker profits
B) To ensure effective record-keeping, administrative procedures, and trust accounting
compliance
C) To provide marketing advice
D) To set interest rates
Answer: B) To ensure effective record-keeping, administrative procedures, and
trust accounting compliance
Rationale: The trust assurance and practice review program ensures effective record-
keeping and administrative procedures, provides education and advice on brokerage trust
accounting, and identifies and resolves potential problems regarding trust accounting
requirements .
