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FINTRAC Mortgage Sector Compliance Checklists

FINTRAC’s mortgage sector guidance makes clear that anti-money laundering and anti-terrorist financing compliance obligations are tied to the specific role an entity plays in a mortgage transaction. Where a mortgage broker, lender, and mortgage administrator are each involved in the same file, each may have separate and independent obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its Regulations.

The following checklists are designed as a practical reference for the activities described in FINTRAC’s scenarios, including new mortgage originations, renewals, payment handling, and lender-administrator payment flows. They are not a substitute for the legislation, regulations, or FINTRAC guidance, but they provide a useful framework for reviewing whether required recordkeeping, client identification, beneficial ownership, third-party determination, politically exposed person screening, and ongoing monitoring steps have been addressed.

1. Checklist: Arranging a New Mortgage Loan

Activity: Mortgage broker arranges a new mortgage loan for a client; lender funds the loan.

Mortgage Broker

  • Keep an information record on the borrowing client.
  • Keep a mortgage loan record on the client.
  • Verify the client’s identity using a prescribed method.
  • Keep records of the identity verification.
  • Record the purpose and intended nature of the broker’s business relationship with the client.
  • Begin ongoing monitoring of the business relationship.
  • Keep records relating to ongoing monitoring.
  • Take reasonable measures to determine whether a third party is involved.
  • Take reasonable measures to determine whether the client is a politically exposed person (PEP) or head of an international organization (HIO).
  • If a third party is involved, obtain additional required information and keep records of it.
  • If the client is a PEP or HIO, obtain additional required information and keep records of it.
  • Confirm whether the required prescribed information is already contained in the mortgage application or other retained documents.

Lender

  • Keep an information record on the borrowing client.
  • Keep a mortgage loan record on the client.
  • Verify the client’s identity using a prescribed method.
  • Keep records of the identity verification.
  • Record the purpose and intended nature of the lender’s business relationship with the client.
  • Begin ongoing monitoring of the business relationship.
  • Keep records relating to ongoing monitoring.
  • Take reasonable measures to determine whether a third party is involved.
  • Take reasonable measures to determine whether the client is a PEP or HIO.
  • If a third party is involved, obtain additional required information and keep records of it.
  • If the client is a PEP or HIO, obtain additional required information and keep records of it.
  • Confirm whether the required prescribed information is already contained in the mortgage application or other retained documents.

Practical Note

  • Confirm that the broker’s and lender’s descriptions of the purpose and intended nature of the relationship reflect their different roles.

2. Checklist: Processing a Mortgage Renewal

Activity: Mortgage broker arranges a renewal for an existing client with the same lender.

Mortgage Broker

  • Keep or update the information record on the client.
  • Keep or update the mortgage loan record.
  • Determine whether identity verification must be repeated.
  • If relying on prior verification, confirm that:
    • identity was previously verified using a prescribed method;
    • records were retained in accordance with the applicable rules at the time; and
    • there is no reason to doubt the information previously obtained.
  • Update the purpose and intended nature of the business relationship, as needed.
  • Continue ongoing monitoring.
  • Keep updated records of monitoring activities.
  • Take reasonable measures to determine whether a third party is involved.
  • Take reasonable measures to determine whether the client is a PEP or HIO.
  • If a third party is involved, obtain additional required information and keep records of it.
  • If the client is a PEP or HIO, obtain additional required information and keep records of it.
  • Confirm whether existing records remain complete and current.

Lender

  • Keep or update the information record on the client.
  • Keep or update the mortgage loan record.
  • Determine whether identity verification must be repeated.
  • If relying on prior verification, confirm that:
    • identity was previously verified using a prescribed method;
    • records were retained in accordance with the applicable rules at the time; and
    • there is no reason to doubt the information previously obtained.
  • Update the purpose and intended nature of the business relationship, as needed.
  • Continue ongoing monitoring.
  • Keep updated records of monitoring activities.
  • Take reasonable measures to determine whether a third party is involved.
  • Take reasonable measures to determine whether the client is a PEP or HIO.
  • If a third party is involved, obtain additional required information and keep records of it.
  • If the client is a PEP or HIO, obtain additional required information and keep records of it.
  • Confirm whether existing records remain complete and current.

3. Checklist: Mortgage Administrator Receives First Borrower Payment

Activity: Mortgage administrator receives the first payment from a borrower and remits it to the lender.

Mortgage Administrator

  • Keep an information record on the lender.
  • Keep an information record on the borrower.
  • Keep a receipt of funds record for the payment received.
  • Keep official corporate records for the lender showing authority to bind the corporation.
  • Keep official corporate records for the borrower showing authority to bind the corporation.
  • Keep a mortgage loan record for the borrower’s loan.
  • Verify the identity of the lender using a prescribed method.
  • Verify the identity of the individual acting on behalf of the lender.
  • Verify the identity of the borrower using a prescribed method.
  • Verify the identity of the individual acting on behalf of the borrower.
  • Keep records of all identity verification steps.
  • Record the purpose and intended nature of the relationship with the lender.
  • Record the purpose and intended nature of the relationship with the borrower.
  • Begin ongoing monitoring of both business relationships.
  • Keep records relating to ongoing monitoring.
  • Obtain beneficial ownership information for the lender.
  • Take reasonable measures to confirm the accuracy of the lender’s beneficial ownership information.
  • Obtain beneficial ownership information for the borrower.
  • Take reasonable measures to confirm the accuracy of the borrower’s beneficial ownership information.
  • Take reasonable measures to determine whether a third party is involved.
  • If a third party is involved, obtain additional required information and keep records of it.
  • Confirm whether required information is already contained in other retained documents and whether those records are complete.

4. Checklist: Mortgage Administrator Receives Subsequent Borrower Payments

Activity: Mortgage administrator receives later payments from the borrower and remits them to the lender.

Mortgage Administrator

  • Keep a receipt of funds record for each payment received.
  • Confirm whether the information record on the lender remains current.
  • Confirm whether the information record on the borrower remains current.
  • Confirm whether official corporate records for both entities remain current.
  • Confirm whether the mortgage loan record remains accurate and current.
  • Determine whether new copies of records are necessary or whether existing records can be relied upon.
  • If any required information has changed, update the relevant records.
  • Determine whether identity verification must be repeated.
  • If relying on prior verification, confirm that:
    • identity was previously verified using a prescribed method;
    • records were properly retained; and
    • there is no reason to doubt the information previously obtained.
  • Continue ongoing monitoring of relationships with both the lender and the borrower.
  • Confirm that the purpose and intended nature of each relationship remains current.
  • Confirm that beneficial ownership information remains current.
  • Take reasonable measures to determine whether a third party is involved.
  • If a third party is involved, obtain additional required information and keep records of it.

5. Checklist: Lender Advances Loan to Corporate Borrower

Activity: Lender initially provides the mortgage loan to a corporate borrower.

Lender

  • Keep an information record on the borrower.
  • Keep a mortgage loan record on the borrower.
  • Keep official corporate records showing the borrower’s authority to be bound.
  • Verify the identity of the borrower using a prescribed method.
  • Verify the identity of the individual acting on behalf of the borrower.
  • Keep records of identity verification.
  • Record the purpose and intended nature of the relationship with the borrower.
  • Begin ongoing monitoring of the business relationship.
  • Keep records relating to ongoing monitoring.
  • Obtain beneficial ownership information for the borrower.
  • Take reasonable measures to confirm the accuracy of that beneficial ownership information.
  • Take reasonable measures to determine whether a third party is involved.
  • If a third party is involved, obtain additional required information and keep records of it.

6. Checklist: Lender Receives Payments Through Mortgage Administrator

Activity: Lender receives payments from a mortgage administrator that were originally submitted by the borrower.

Lender

  • Keep a receipt of funds record on the mortgage administrator.
  • Record the borrower’s:
    • name;
    • address; and
    • nature of business.
  • Keep official corporate records showing the mortgage administrator’s authority to be bound.
  • Verify the identity of the mortgage administrator using a prescribed method.
  • Verify the identity of the individual acting on behalf of the mortgage administrator.
  • Keep records of identity verification.
  • Record the purpose and intended nature of the relationship with the mortgage administrator.
  • Conduct ongoing monitoring of that relationship.
  • Keep records relating to ongoing monitoring.
  • Obtain beneficial ownership information for the mortgage administrator.
  • Take reasonable measures to confirm the accuracy of that beneficial ownership information.
  • Take reasonable measures to determine whether a third party is involved.
  • If a third party is involved, obtain additional required information and keep records of it.
  • Confirm whether existing records can be relied on and whether they remain current.

7. General Recordkeeping and Monitoring Checklist

Activity: Ongoing compliance management across mortgage activities.

All Reporting Entities

  • Ensure internal policies and procedures reflect applicable FINTRAC obligations.
  • Confirm that responsibilities are clearly assigned among broker, lender, and administrator functions.
  • Confirm that required records are complete, retained, and current.
  • Avoid unnecessary duplication, but ensure existing documents contain all prescribed information.
  • Review whether any changes in client information require record updates.
  • Review whether any changes in ownership or control require updates to beneficial ownership records.
  • Review whether ongoing monitoring is being documented consistently.
  • Review whether third-party determinations are being made and documented where required.
  • Review whether PEP/HIO screening is being performed where required.
  • Confirm that identity verification records are retained and can support reliance on prior verification where permitted.

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