Humber/Ontario Real Estate Course 4 Exam Practice

Which statement accurately describes mortgage lending sources in Ontario?

1. Life insurance companies are an example of an unregulated lending source.

2. Private mortgages are not regulated under the Mortgages Act.

3. The Ontario mortgage market relies solely on banks and credit unions for residential mortgages.

4. A credit union in Ontario can provide mortgages, but only to its members.

5. Real estate agencies commonly provide direct mortgage funding.

6. Mortgage brokers must be members of a provincial association.

The correct answer is: A credit union in Ontario can provide mortgages, but only to its members.

A credit union in Ontario can provide mortgages, but only to its members, is the most accurate statement. This is because credit unions, unlike banks, are non-profit organizations owned and operated by its members. Therefore, they are only able to offer their financial services, such as mortgages, to their members. Option A is incorrect as life insurance companies are regulated under the federal Office of the Superintendent of Financial Institutions (OSFI). Option B is incorrect as private mortgages are regulated under the Mortgages Act in Ontario. Option C is incorrect as banks and credit unions are not the only sources of residential mortgages in Ontario. There are also other regulated lenders such as trust and loan companies. Option E is incorrect as real estate agencies do not directly provide mortgage funding. They may refer clients to mortgage brokers or have partnerships with certain lenders, but they do not fund mortgages themselves. Option F is also incorrect as mortgage brokers in Ontario are regulated by the Financial Services Commission of Ontario and do not need to be members of a provincial association.