The Importance of Using a Licensed Mortgage Administrator

*This post is sponsored by one of The Real Estate Investment Network’s Trusted PartnersNorthLend Financial Inc. To become a contributing editor or to learn about our sponsorship opportunities, please contact us at david@reincanada.com.

*This an important update to the original article published on August 21, 2020, which contained statements that were not accurate or consistent within the guidelines and role of a Mortgage Administrator.
Your REIN team is committed to providing you the most current and accurate information and this article has been amended for the highest level of accuracy.

What is a Mortgage Administrator?

Mortgage administrators track loan agreements and enforce mortgage payments. It is mandatory they have a Financial Services Regulatory Authority (FSRA) license, which allows mortgage administrators to receive payments from you and send them to lenders, taking the work out of managing secured mortgage agreements for you. A mortgage administrator collects payments from the borrower and remits them to the investors and can take enforcement actions. 

Mortgage Administrator Skills

A mortgage administrator is responsible for proving all necessary information in written agreements with lenders/investors. As outlined in the Compliance Checklist for Mortgage Administrators, the information mortgage administrators must include in the agreements are the following:

1. Name in which the mortgage is registered

2. Circumstances in which the lender/investor may dispose of his/her interest in the mortgage

3. Rights and duties of each lender/investor if a borrower defaults on the mortgage, and the costs for which each lender/investor will be responsible

4. Procedures to follow in case of a foreclosure or power of sale

5. Obligation of the Mortgage Administrator to promptly inform each lender/investor in case of mortgage default, new encumbrances, and other changes that affect the mortgage

Duties & Essential Skills

  • Verify the identity of each lender before entering into an agreement 
  • Always provide your full name and Mortgage Administrator licence number when asked
  • Disclose all fees and related information 
  • Disclose your relationship with the borrower
  • Disclose any and all potential conflict of interest
  • Never administer a mortgage for a lender if you think the investment is unlawful 
  • Return the original documents to the owner when requested at no charge
  • Notify each investor / lender of any potential impacts of the Market Disruption on the performance of the mortgage / mortgage investment being administered
  • Must be properly licensed 
  • Must be clear, concise and logical in written disclosures, consents and acknowledgements
  • Must be detail-oriented 

How to Be A Successful Private Lender

As a private lender, there are fundamental techniques that we need to be successful. Like any business, preparation, planning, and research are essential to ensure a successful outcome. A private lender should always assess the creditworthiness, financial capacity, and character of the borrower before entering a mortgage contract.

Private lenders must think like a bank and put themselves in the right mindset to maximize their returns with the smallest amount of risk. Banks charge as many fees as possible, limiting what they lend out on a specific property and charge high-interest rates. Mimic the techniques the banks employ, and you will find yourself on the path to success.

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