The SAFE Mortgage Licensing Act
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 governs licensing for mortgage professionals. The U.S. Department of Housing and Urban Development identifies SAFE's purpose as reducing mortgage fraud and protecting consumers.
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Nationwide Mortgage Licensing System
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Mortgage loan originators must register with the National Mortgage Licensing System and Registry, an online application system that provides "a centralized and standardized system for mortgage licensing."
Pre-Licensing and Continuing Education
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The NMLS mandates that loan originators complete 20 hours of education covering federal lending laws, ethics, and mortgage origination, and eight hours of annual continuing education.
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SAFE MLO Test
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Mortgage loan originators must also pass the National and State Components of the SAFE test. They need only pass the National Component once, but licensees must pass the State Component for each state in which they seek a license.
Background Check & Credit Report
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MLOs must submit fingerprints for a criminal background check, as the NMLS deems previous checks invalid. The NMLS also pulls a credit report from an independent consumer-reporting agency before approval.
Additional State Requirements
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Mortgage lenders, brokers and originators must comply with mortgage licensing laws for each state in which they operate. The NMLS standardizes its requirements for all states, but each state may impose further regulations, including more hours of pre-licensing and continuing education, as well as additional exam components.
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