How do I disclose to a borrower that selecting a longer amortization in a declining market may have a negative impact if he/she defaults on the mortgage?
The Mortgage Brokerage is required to disclose in writing the material risks of the mortgage and obtain written acknowledgement of receipt from the borrower. (See section 25 of Ontario Regulation 188/08 – Mortgage Brokerages: Standards of Practice.) The Mortgage Brokerage also has a duty to ensure the mortgage is suitable for the borrower, having regard to his/her needs and circumstances. (See section 24 of Ontario Regulation 188/08 – Mortgage Brokerages: Standards of Practice.) If you have additional concerns, speak to your Principal Broker.
