Humber/Ontario Real Estate Course 3 Exam Practice

Which statement is accurate regarding lending sources for mortgages in Ontario?

1. Life insurance companies are an unregulated lending source.

2. Private mortgages are not governed by the Mortgages Act.

3. Ontario's mortgage market relies only on banks and credit unions for residential mortgages.

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

5. Only federal banks are allowed to offer mortgages in Ontario.

6. Real estate brokers are prohibited from acting as mortgage lenders.

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, accurately reflects the nature of credit unions in the province. Credit unions operate under a cooperative model and are designed to serve their members, which often limits their lending activities to individuals who belong to the credit union. This membership requirement ensures that the financial benefits derived from the credit union are returned to those who have joined, fostering a strong sense of community and mutual support among members. In Ontario, credit unions hold licenses under the Credit Union and Caisses Populaires Act, which governs their operations, including mortgage lending. This not only emphasizes their focus on serving their members but also highlights the regulatory framework that governs their activities, distinguishing them from other lending sources that may operate without similar restrictions. By understanding this structure, one gains a clearer picture of the diverse lending landscape available in Ontario, which includes banks, trust companies, and other entities alongside credit unions.