Ontario Mortgage Agent Practice Exam

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Study for the Ontario Mortgage Agent Exam. Prepare with flashcards and multiple choice questions, each question includes hints and explanations. Get ready for your test!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

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Which entity provides a policy to the lender to compensate for losses in a mortgage transaction?

CHMC
Canada Guaranty
Title insurance
Lender

The correct answer is: CHMC

CHMC, or the Canada Mortgage and Housing Corporation, is a federal government entity that provides mortgage insurance to lenders in order to mitigate their risk and compensate for losses in the event of default by the borrower. This insurance allows lenders to offer mortgages to higher-risk borrowers or those with smaller down payments. Canada Guaranty is a private company that also provides mortgage insurance, but only to a select group of lenders. Title insurance, on the other hand, protects the borrower and the lender from any defects in the property's title. And while the lender is involved in the mortgage transaction, it is not the entity that provides the policy to compensate for losses. Therefore, the correct answer is not D Lender.