United States
Hong KongThe SAFE Act explained
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 requires state-licensed originators to complete 20 hours of approved education, pass a test at 75 percent, submit to a background check and register in NMLS.
This is the law that created the exam you are sitting. It passed in 2008, for reasons the date makes obvious.
Before it, mortgage originator regulation was a patchwork. A person barred in one state could work in the next one.
What it requires
| Requirement | The standard |
|---|---|
| Pre-licensure education | 20 hours from an NMLS-approved provider |
| Test | Not less than 75 percent |
| Continuing education | 8 hours a year |
| Background check | Criminal history and credit report |
| Registration | A unique identifier in NMLS |
| Financial responsibility | A surety bond or minimum net worth, set by the state |
Licensed against registered
The distinction the whole Act turns on.
A state-licensed originator works for a broker or non-bank lender, must pass this test, and holds a state license. A federally registered originator works for a depository institution, sits no test, and is registered rather than licensed.
Both get a unique identifier. Only one takes an exam.
The felony bars
A felony conviction in the 7 years before application bars licensure.
A felony involving fraud, dishonesty, breach of trust or money laundering bars it permanently, with no time limit at all. Both are at 12 CFR 1008.105(d).
There is no rehabilitation period for the fraud-related bar. It is asked frequently because candidates assume every bar eventually lapses, and this one does not.
The unique identifier
Every originator gets one and keeps it for their career. It follows you between employers and between states, and it must appear on your advertising and on loan documents.
The point is traceability. A consumer can look up who they are dealing with, and a regulator can see everywhere that person has worked.
Common questions
What is the SAFE Act?
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008, which set national minimum standards for mortgage loan originator licensing and created NMLS registration.
What does the SAFE Act require?
20 hours of approved pre-licensure education, a test score of at least 75 percent, 8 hours of annual continuing education, a background check and registration in NMLS.
What felonies bar an MLO license?
Any felony in the seven years before application, and permanently any felony involving fraud, dishonesty, breach of trust or money laundering.
What is the difference between licensed and registered?
State-licensed originators work for brokers and non-bank lenders and must pass the test. Federally registered originators work for depositories and take no test.
What is the NMLS unique identifier?
A permanent number issued to every originator, which follows them across employers and states and must appear on advertising and loan documents.