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The Regulatory and Compliance Environment

Introduction

Underwriters must be knowledgeable about the legislative framework governing lenders, mortgage brokers, and mortgage default insurers, as well as other laws and regulations designed to ensure consumer protection. They must be able to apply these rules in practice, helping to ensure compliant conduct and prudent risk management, including fraud avoidance.

Course Outline

Section 1: Regulatory Overview
  • Principles-based regulation
  • Regulation of mortgage lenders
  • Anti-money laundering and terrorist financing regulations
  • Regulation of mortgage brokers
  • Regulation of mortgage default insurers
  • The Mortgage Broker Regulators’ Council of Canada (MBRCC)
  • Consumer protection laws (personal information, consumer reporting, anti-spam)
  • Industry association codes of ethics and professionalism
Section 2: Compliance and Risk Management
  • Definition of compliance and compliance risk
  • Roles of compliance function
  • Elements and benefits of creating effective compliance environments
  • Required competencies for compliance roles
  • Consequences of non-compliance
  • Elements  of risk and risk tolerance
  • Basic approach to risk management
  • Reputational risk
  • Risk response options
  • Enterprise risk management 
  • Monitoring risks
Section 3: Fraud Prevention
  • Overview of mortgage fraud
  • Tools used by fraudsters
  • Fraud for shelter
  • Appraisal fraud
  • Illegal property flipping
  • Air loan fraud
  • Title fraud
  • Fraud to further other criminal activities
  • Red flags for fraud and fraud prevention/mitigation strategies
  • Fraud avoidance practices for mortgage brokers
  • Face-to-face verification
  • Non face-to-face verification
  • Verifying application, employment, down payment, property, and credit report information
  • What to do if fraud is suspected