MBRCC - Introduction to MortgageQuote Canada Corp. - ISO 9001:2008 - 100% Regulatory Compliant - Mortgage Processing Technology

 Mortgage Broker Regulator's Council of Canada

MBRCC Secretariat

5160 Yonge Street

16th Floor, Box 85 

Toronto, ON M2N 6L9

Email: mbrcc-ccarch@fsco.gov.on.ca

Telephone: (416) 590-2036 

Fax: (416) 226-7878

Shani Ratnapala

Policy Manager

Hello Ms. Ratnapala,

My name is Anoop Bungay and my firm is Canada's undisputed leader in process compliance and quality management in Canada's Finance Sector, for the scope of: Mortgage Banking and Mortgage Brokering. Specifically, since May 2008, MortgageQuote Canada Corp. is Canada's first and only company in the finance sector that "operates a Quality Management System which complies with the requirements of ISO 9001:2008 for the following scope: Provision of mortgage banking and mortgage brokerage services." Bank of Canada and CIBC also have ISO 9001-family certifications (we share the same auditors as CIBC), but neither company has certification in the field of mortgages.

WHAT DO WE WANT?

In the interests of public service, risk reduction and liability cost reduction, we seek to have mortgage regulators and errors and omissions insurance companies require that all mortgage brokers who seek to trade in either mortgage transactions or specifically, PRIVATE LENDING mortgage transactions, to utilize MortgageQuote's ISO 9001:2008 certified, litigation-tested, proprietary, Integrated Mortgage Processing and Quality Management System for processing their transactions.

Real Life Business Problem that we Solve (source page):

Experienced Errors and Omissions Insurance professionals state that that the biggest complaint of a mortgage brokerage firm and their agents, when subject to either a valid or frivolous E&O claim, is that the broker or agent 'did nothing wrong', but cannot effectively prove it - in an objective manner. Well now you can.

Our ISO 9001:2008 certified, regulatory compliant, litigation-tested, proprietary, Integrated Mortgage Processing and Quality Management System mortgage operations engine is designed to ensure mortgage brokers operate in a manner that minimizes E&O claims and if a claim arises, is the basis of proving whether or not a mistake was made. There are over 1000 steps to a mortgage transaction and at MortgageQuote, each and every step is documented and managed for quality by real-time validation.

The system is designed to minimize errors, omissions, "willful blindness" events and related processing errors by licensed agents and unlicensed employees. The MQCC "engine" is is both a management system and quality management system for a mortgage brokerage firm.

While the system works for all types of mortgage transactions, we have found it is very effective for controlling the quality of private mortgage transactions which tend to be more profitable than non-private mortgage transactions. And an area of the industry that would best benefit from a system such as this.

We are only interested in sharing the technology in collaboration with regulators or EOE insurance providers, (both insurers and EO insurance brokers). 

 

WHY MBRCC?

Your member regulator's are too busy regulating; MBRCC is uniquely created to address a query like ours for the benefit of your members, who trust your organization to represent their interests.

In your role at the Secretariat and your position as Policy Manager, you are uniquely positioned to understand the nature of MortgageQuote's "inventive solution" and it's implications on an ecosystem that, until now, has not been able to provide a definitive, third-party, internationally accepted (ISO) and certifiable business method to ensure 100% regulatory compliance in each and every originated mortgage transaction by members of the mortgage industry. MortgageQuote can work with MBRCC and MBRCC and share it's findings about our technology with it's member regulators for possible implementation in various (all) member jurisdictions.

Feel free to visit our website (www.mortgagequote.ca) and explore what we have done.

Your initial thoughts?

Anoop Bungay 

--

If you have questions, please contact me at your convenience. In order to prevent errors and omissions, email is the preferred choice of communication. 

Thank you for choosing MortgageQuote Canada Corp., 'Proud sponsor of the Canadian dream.'®

Sincerely yours,

 

 

 

 

 

A. K. (Anoop) Bungay,  B. Comm., AMP
Broker

MortgageQuote Canada Corp.
Alberta (AB) * British Columbia (BC) * Ontario (ON)

ON Brokerage License #12279

communication-policy.mortgagequote.ca

www.mortgagequote.ca

        

"Proud Sponsor of the Canadian Dream"^®

 

An ISO 9001:2008 Registered Company

 

PRIVILEGE AND CONFIDENTIALITY NOTICE

This communication and any attachment are confidential and may be subject to broker-client/lender-client privilege.  Any other distribution, copying or disclosure is strictly prohibited.  If you have received this communication or any attachment in error please notify us by reply and delete the communication or attachment.

MortgageQuote Canada Corp - MQCC® Errors and Omissions (E&O) Claim Avoidance System

To a Canadian regulated insurance provider for financial services professional liability insurance. 

As you explained, the biggest complaint of a mortgage brokerage firm and their agents, when subject to either a valid or frivolous E&O claim, is that the broker or agent 'did nothing wrong', but cannot effectively prove it - in an objective manner. Well now they can.

Our ISO 9001:2008 certified, litigation-tested, proprietary Integrated Mortgage Processing and Quality Management System is designed to ensure mortgage brokers operate in a manner that minimizes E&O claims and if a claim arises, is the basis of proving whether or not a mistake was made. There are over 1000 steps to a mortgage transaction and at MortgageQuote, each and every step is documented and managed for quality by real-time validation.

The system designed to minimize errors, omissions, "willful blindness" events and related processing errors by licensed agents and unlicensed employees. It is both a management and quality management engine for a mortgage brokerage firm.

While the system works for all types of mortgage transactions, we have found it is very effective for controlling the quality of private mortgage transactions which tend to be more profitable than non-private mortgage transactions. And an area of the industry that would best benefit from a system such as this.

 

We are only interested in sharing the technology in collaboration with regulators or EOE insurance providers, like [Insurance Provider] (or Major Insurance Broker's). In this business, first in, wins. You will differentiate yourselves from the market place and the technology will become the defacto standard to minimize successful errors and omissions claims.

Thank you in advance,

Anoop Bungay

Risk Management for Mortgage Industry Professionals Trading in Private Mortgages

For a traditional licensed mortgage brokerage firm, dealing in private mortgages or dealing with private mortgage investor-lenders can be very lucrative, yet there is substantial risk associated with such transactions, if not done in a 100% compliant manner.

Need proof of the risk to a licensed mortgage brokerage? Visit the following links to see the regulatory enforcement activities; not all contain items related to private mortgages. Many private mortgage transaction complaints are "dealt" with the mortgage broker and complainants directly, before a statement of claim is filed or a regulatory complaint is submitted. 

Alberta: Case Summaries

British Columbia: Enforcement

Ontario: Enforcement Activities

Time and again we have cautioned experienced mortgage industry members (owner/officers/directors/shareholders of mortgage brokerage firms) to rely upon MortgageQuote to help reduce the risk of financial and reputation liability, when dealing with private mortgages (transactions or investor-lenders). We accomplish this by having the licensed mortgage agents/employees (LMAE) forward their private mortgage applications or prospective private mortgage investor-lenders, to MortgageQuote for processing. We call it: PRIVATE SAFE^TM.

 

PRIVATE SAFE^TM is a certified quality managed service, designed specifically for licensed mortgage brokerages to help them reduce the risk of liability when dealing with: private mortgage applications or private mortgage investor-lenders. The service does two things: 

1 - processes a licensed mortgage brokerages non-standard (private) mortgage applications in a 100% regulatory compliant & Errors and Omissions compliant environment. Processing includes "deal" receipt, data compilation, pre-underwriting, presentation & marketing to authenticated private equity mortgage investor-lenders.

2 - maintains and manages business relationships with "legislatively defined" private investor-lenders. 

PRIVATE SAFE^TM Components:

• Dealing with private investor-lenders in matters relating to private mortgages
• Marketing mortgage applications to authenticated private investor-lenders
• Communicating with the private investor-lender
• Preparing application data for private investor-lender underwriting
• Preparing commitment letters
• Transmitting and maintaining applicant non-public data in a secure environment
• Advising the private investor-lender
• Working in a certified, quality managed environment
• Maintaining Errors and Omissions insurance designed specifically for private real estate finance brokerage
• Operating processes and controls are subject to continual improvement and audited for effectiveness 2 times per year by 3rd-party internal and external auditors

PRIVATE SAFE^TM is activated when licensed mortgage agents/employees forward their private mortgage requests or prospective private mortgage investor-lender's to MortgageQuote Canada Corp.

Reduction of Exposure to Liability:

In cases where a mortgage investor-lender is known to a licensed mortgage agent/employee, there is no practical way for a traditional mortgage brokerage firm to fulfill it's regulatory (or legal) obligations to both a "legislatively defined" private lender and retail mortgage applicant because at the least, a private lender would need the LMAE's advice. While it is possible that a mortgage brokerage may permit its agents/employees to ask their mortgage applicants to waive their right to receive advice, this may not be well-received by the customer, given that the agent presumably has been working with the applicant for some time prior to making the decision to approach private financing sources.

For example, in Alberta legislation, a private lender is defined as "any persons NOT engaged in the business of making loans secured with mortgages". Given this definition, any mortgage brokerage who's agents/employees represent a private lender, must ensure that the agent correctly provides a higher standard of care to the private lender because the private lender is deemed "not to be in the business of making loans secured with mortgages". Given the inexperience, there is an expectation that the private lender will rely upon the LMAE to provide advice relating to the transaction. The moment the LMAE provides advice to the private lender, the LMAE cannot act for the borrower, nor take the role of an intermediary for both the private lender and the borrower. Other jurisdictions in Canada provide similar definitions.

While it may work in the real estate business, we do not advise mortgage broker firms to permit multiple agents in the same office to work on the same file, where one represents a private lender and the other represents the borrower.

For example, in Alberta, the regulations are very clear:

Obligations to a Lender Client 

73(1)

Mortgage brokerages that represent lenders in a mortgage deal must enter into written service agreements with lender clients.

Similar rules exist in other jurisdictions in Canada, including BC and Ontario. The rule applies at a Brokerage level and not at an agent/employee level. While some obligations may be waived in writing by a lender client, there have been cases where lenders (or borrowers) have waived their rights and, at a later time (usually if a "deal goes bad"), have asserted that they were not aware of what they were doing when they signed the waiver. Further, the lender (or borrower) may claim that they were recommended to sign a waiver, without being offered the requisite legal counsel; or the lender (or borrower) may claim that they simply did not fully understand what the licensed mortgage broker was attempting to do. This type of misunderstanding may occur more frequently when dealing in private mortgages with persons who are "not in the business of making loans secured with mortgages", namely, private lenders.

By working with MortgageQuote on your private mortgage transactions (or private mortgage investor-lenders), the limited liability benefits of an arm's length relationship between different entities (the borrowing agent and the lending agent) more often exceeds the financial benefits gained from participating in a non-arms length manner. 

Additionally, most mortgage brokerages do not have the resources to implement effective or 3rd party-validated, "ethical walls"; ensuring isolation of communication and data between the agent for the private lender and the agent for the borrower. Moreover, given that the private lender would need professional mortgage advice, it stands to follow that private lender's agent would be paid a fee for providing advice to the private lender. The mortgage brokerage firm receives a fee when its agents complete a transaction and if the firm's agents act for both the lender and the borrower, additional perceived conflicts of interest may arise. 

MortgageQuote Private Mortgage Training Programs for Licensed Mortgage Brokerage Firms

Visit academy.mortgagequote.ca to learn about training programs designed for licensed mortgage brokerages who want to ensure their licensed agents/employees understand the generally accepted practice when dealing in private mortgages (transactions or investor-lenders).

To set up PRIVATE SAFE^TM for your licensed brokerage, or to setup a customized private mortgage training program, please email: underwriting[at]mortgagequote.ca.

Quality Let's You Trust the Process, Not the Person

If you have read the papers lately, you will have heard about companies losing significant shareholder value due to individuals who have made questionable business decisions.

In today's economy, it is more important than ever to work with companies who are actively dedicated to providing services that are underpinned by an internationally recognized (ISO 9001) quality management system (QMS). A QMS ensures that the business operates in a manner that enables customers to "get what they ordered". Since 2009, MortgageQuote Canada Corp. has implemented a QMS that is certified to the standards of ISO 9001:2008. Such dedication to quality instills a confidence that is seldom seen in the financial services sector.

"Quality-in-Business" is rare; "Quality-in-Financial Business" is almost unheard of.

When a company operates with a world-class quality management system, stakeholders know that they no longer need to rely on an individual, but rather a process, in order to "get the job done".

When it comes to money, the more systems in place to make the customer happy, the better.

Update: December 2020

How Does MQCC™ achieve this for the past 15 years? Through application of non-novel, conformity science principles, namely, the subordinate concept system knowns as the Bungay Unification of Quantum Processes Algorithm also represented by its trademark, source identifier brand name, the "Principles of 'BlockChain'™".

Services are delivered through systems, technology, services and goods marketed commercial as the:

• Bungay International Technology (BIT™) brand Conformity of Organization and Individuals Network (COIN™); and 

• Bungay Logic and Order, Conformity Kernel (BLOCK™) brand for Cyber/non-cyber, Harmonized, Artificial/non-artificial Intelligence Network (CHAIN™) personal and peer-peer-services

Read the textbooks found at Amazon.com and Google Play Books under author name: Anoop Bungay

  Learn about mortgage industry pricing!

Industry Report: The Market & Price of Money: Canada & the World

Why provide full disclosure on a mortgage application and what's the use when "all" lenders seem to say "no"

THE CONTENTS OF A MORTGAGE APPLICATION, WHEN SIGNED BY AN APPLICANT, ARE CERTIFIED TO BE TRUE. WE DON'T EXPECT CLIENTS TO GIVE US ANY MORE INFORMATION UNLESS WE NEED THE INFORMATION FOR UNDERWRITING PURPOSES. IN SOME CASES, WE MIGHT ASK A CLIENT TO REVISE A MORTGAGE APPLICATION - OR PROVIDE ADDITIONAL INFORMATION - IF WE DETERMINE THAT THE ORIGINAL MORTGAGE APPLICATION CONTAINED ERRORS OR OMISSIONS.

THE MORE WE UNDERSTAND THE REALITY OF AN APPLICANT'S FINANCIAL SITUATION, THE BETTER WE ARE ABLE TO FIND A SOLUTION. WHEN IT COMES TO COMPLICATED MORTGAGE TRANSACTIONS, MERELY BECAUSE SOME LENDERS MIGHT NOT BE WILLING TO SAY "YES" OR GO BEYOND A CERTAIN LOAN TO VALUE DOES NOT MEAN THAT OTHER LENDERS ARE UNWILLING TO HELP; THE DISTINCTION BETWEEN A LENDER WHO IS "QUICK TO SAY NO" VERSUS A LENDER WHO IS WILLING TO HELP BUT MIGHT "TAKE TIME TO SAY YES", IS THE DEGREE TO WHICH INFORMATION IS READILY MADE AVAILABLE FOR THE LATTER, IN ORDER TO MAKE AN INFORMED DECISION.

CORPORATE APPLICANTS AND MORTGAGE BROKERS: THE DEFINITIVE GUIDE TO CHOICE

Do you work for a corporation that presently seeks or may one day, seek to apply for a mortgage? Don't go straight to a Mortgage Broker, it's the wrong thing for a corporation to do. To understand more, read below, an excerpt from the MortgageQuote.ca webpage entitled:

Corporate/Commercial (VenCap Mortgage^TM), Private Business Owner, Construction, Renovation & Developer Borrowers

ATTENTION ALL PROSPECTIVE CORPORATE CLIENTS:

PLEASE NOTE:
MortgageQuote.ca only accepts corporate clients if the corporate entity has approached at least their own institutional bankers first; and preferably a second banker or institutional lender in order to get a first and possibly, second institutional opinion respecting their project and mortgage financing request. Why?

Institutional bankers are the best free source of guidance and the cheapest mortgage source for corporate entities.

Rationale:
Corporations often retain Mortgage Brokers when they don't need to. In a corporate context, a corporation's own banker is a far better source of capital to a corporate applicant.

Further, corporate transactions are based upon many more factors than non-corporate transactions and decisions to lend money to corporate applicants can only take place after a complete corporate underwriting process has taken place.

Unlike with institutional banks, MortgageQuote.ca's corporate underwriting services are not free; both upfront  Mortgage Broker retainer fees and downstream Mortgage Broker service/origination fees are payable. Proper corporate governance requires that a corporation should only bind itself to a Mortgage Broker Services Agreement with MortgageQuote.ca if there is a clear and demonstrable need established for a non-bank, brokered financing solution.

Further, MortgageQuote.ca does not seek to enter into a services agreement with a corporation that could already be satisfactorily qualified for financing from an institutional bank or lender. It makes no sense because even if MortgageQuote.ca were to arrange a "cheaper mortgage", Mortgage Broker fees are still payable so when the overall cost of borrowing is calculated, the cost of the Mortgage Broker's involvement will increase the corporations overall costs and often make the broker-sourced "cheaper option", more expensive than a non-brokered institutional bank solution.

In many cases, one of the key benefits of a mortgage brokered transaction is that the Mortgage Broker may identify a lender who may be both "cheaper" and "less burdensome" conditions-wise, than the corporations current available financing option. Or, the broker-sourced lender may be more expensive but will also loan a higher amount of money, or require less conditions precedent. Only once a corporation has approached its own "go-to" bankers, can a starting level of understanding be established, so that the overall finance-raising strategy can include a determination of whether or not the corporation may want to invest in the services of a Mortgage Broker for a second opinion or alternate, broker-sourced possible financing solutions.

It would be considered poor corporate governance if a corporation simply retained a Mortgage Broker merely because the corporation does not have an employee available to manage the financing request process. This is a false logic because in many cases of corporate mortgage finance, the Mortgage Broker fee may be more than the annual salary of the corporation's average employee. Indeed, if the corporation is truly a going-concern, it should simply appoint its CFO or if the corporation does not have a CFO, then its accountant, to take the role of approaching its own bankers. That's far less expensive than a third party Mortgage Broker and proper corporate governance. Shareholders will require that all competent corporate managers would act like this.

Therefore, all potential MortgageQuote.ca corporate applicants should go to at least their existing institutional bankers first. It truly is the right thing to do.

If, after the corporation has approached at least its own bankers and the bankers can not approve the financing; or, the bank can approve some sort of financing but not enough; or, the banks conditions are too burdensome, or the bank is materially too slow, then the corporation may want to reach out to MortgageQuote.ca.

The primary contact officer of the corporation will be required to disclose to MortgageQuote.ca the efforts the corporation sought to obtain financing from at least their own bankers and why exactly they realized the bank would not be helpful.

This process establishes two critically important and indisputable things:

1 - it provides MortgageQuote.ca with an honest, 3rd Party assessment of the corporation's financing request from the bankers point of view. This will enable MortgageQuote.ca to quickly and freely understand the corporations strengths and weaknesses from a credit underwriting prospective.

2 - it provides the corporation with the realization that if their project is truly worth it to them, then a mandate for a non-bank solution, namely a Mortgage Broker solution is established. The only question left for the corporation is "which mortgage broker to use".

To learn more, email us at info[at]mortgagequote.ca.