Mortgage brokerages and mortgage administrators are required to file their Annual Information Return (AIR) with FSRA by March 31 of each year[1]. FSRA collects data about the nature, size, and practices of each licensed firm’s business. As part of the requirements for maintaining a licence, a brokerage or administrator must file the AIR even if it did not conduct business during the reporting period.
To better protect consumers, FSRA uses the AIR information to review industry trends, and determine the nature and extent of its regulatory activities. FSRA also uses the AIR data to support policy analysis that informs policy decisions.
Failure to file the AIR may lead to regulatory actions.
What we review in an AIR
FSRA reviews AIR filings to assess brokerage and administrator compliance and accuracy in reporting. For example, FSRA reviews AIR data against the following:
- the previous years’ filings for each licensed entity to identify material year-over-year changes that may not be explained by business growth or contraction
- non-compliance with the Mortgage Brokerages, Lenders and Administrators Act, 2006 requirements identified in responses provided (e.g.: absence of an errors & omissions coverage)
- other real estate market data sources such as Teranet, the exclusive provider of Ontario’s online property title search and land registration or reports from organizations such as the Canadian Mortgage Housing Corporation
Common issues we’ve seen in AIR filings and how they were addressed
Incorrect reporting
FSRA noted the following common issues with respect to the 2021 AIR data. This suggests that principal brokers may not fully understand what data is required or are reporting inaccurate data:
- 30 brokerages (2.4%) whose number and/or dollar value of mortgages dealt increased by 200% or more from previous year
- 43 brokerages (3.4%) reported not closing any mortgage transactions, even though they reported carrying on dealing activities in their 2021 AIR and having dealt $20 million or more in mortgages in 2020
- 113 brokerages (9%) who did not report trading activity in 2020 reported such activity in 2021. Nine (less than 1%) of these brokerages also reported a 100% decrease in mortgage dealing in 2021, totaling approximately $1 billion dollars
- 15 mortgage brokerages and three mortgage administrators (less than 1%) did not provide confirmation of acceptable errors and omissions coverage, reported not having one, or provided unrelated information
FSRA is following up with these mortgage brokerages and administrators to clarify the information reported and request the AIR be updated, where applicable. The seven licensees without an acceptable errors and omissions coverage have been escalated for further review and regulatory actions as applicable.
Late or non-filing of AIR
FSRA noted that for the years between 2017 and 2020, 119 mortgage brokerages and 19 mortgage administrators did not file their AIRs for a single year or multiple years and it contacted these licensees to flag the non-compliances. Regulatory actions were also taken on mortgage brokerages and mortgage administrators that filed their 2020 AIR late.
The table below provides information on the regulatory actions taken as of April 2022 where non-compliance was or will not be rectified:
| Mortgage Brokerages (107) | Mortgage Administrators (8) |
|---|---|
| 82 caution letters for late filing of 2020 AIR | 7 caution letters for late filing of the 2020 AIR |
| 4 caution letters for non-filing of 2019 AIR | 1 surrender of licence |
| 13 caution letters for non-filing of 2018 AIR | |
| 8 caution letters for non-filing of 2017 AIR |
FSRA is also currently working on revoking the licences of 23 mortgage brokerages who did not file their AIR and currently have no active principal broker.
What this means for you
Mortgage brokerages and mortgage administrators must report accurate information in their AIR and submit it before the deadline. Principal brokers must also attest to the accuracy of the AIR.
Failure to comply with this requirement will lead to regulatory actions. Continued non-compliance will result in progressively severe actions such as summary administrative monetary penalties. These reporting issues can also impact the brokerage, administrator, or principal broker’s licence suitability.
1 As per section 2 of Ontario Regulation 193/08.