Answer a: False
Mortgage brokers have a duty not to advise or encourage the commission of an illegal act. Under this duty, Nathan must cease to act for a client who asks him to commit an illegal act, and cease to represent the client in obtaining a loan based on misleading representations. It is not enough to warn the client or try to establish the truthfulness of the matter: Nathan must terminate the brokerage contract; under the circumstances, this will not be considered as a breach of his other professional obligations, including the obligation to act promptly.

Answer b: Correct answer
Mortgage brokers have a duty not to advise or encourage the commission of an illegal act. Under this duty, Nathan must cease to act for a client who asks him to commit an illegal act, and cease to represent the client in obtaining a loan based on misleading representations. Nathan must immediately withdraw from the matter.

Answer c: False
Mortgage brokers have a duty not to advise or encourage the commission of an illegal act. Under this duty, Nathan must cease to act for a client who asks him to commit an illegal act, and cease to represent the client in obtaining a loan based on misleading representations. It is not enough to warn the client or try to establish the truthfulness of the matter: Nathan must terminate the brokerage contract; under the circumstances, this will not be considered as a breach of his other professional obligations, including the obligation to act promptly.

Answer d: False
Mortgage brokers have a duty not to advise or encourage the commission of an illegal act. Under this duty, Nathan must cease to act for a client who asks him to commit an illegal act, and cease to represent the client in obtaining a loan based on misleading representations. It is not enough to warn the client or try to establish the truthfulness of the matter: Nathan must terminate the brokerage contract; under the circumstances, this will not be considered as a breach of his other professional obligations, including the obligation to act promptly.

References

Reference manual: Responsible Officer, Mortgage Brokerage Guide, Preliminary Edition, 2021, sections 2.3.1.7 and 2.3.1.8.

Evaluated competency sub-component in Curriculum: 2.3 Integrate into professional practice the ethical obligations and duties prescribed by the legislation and regulations in effect.

Set up an ethical professional practice in compliance with the rules governing the management of a mortgage brokerage firm Competency 16-117

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