The SAFE Act is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators and for the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) to establish and maintain a nationwide mortgage licensing system and registry for the residential mortgage industry.
Licensing Updates
What you need to know about SAFE Act mortgage originator education requirements
The Secure and Fair Enforcement for Mortgage Lending (SAFE), part of the Housing and Economic Recovery Act of 2008 (HERA), established minimum standards for mortgage training, both pre-licensing and continuing education.
These requirements are currently being implemented throughout the states. The National Mortgage Licensing System (NMLS), which is responsible for implementing these requirements, was created by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).
Requirements for state-licensed mortgage loan originators
- Complete at least 20 hours of pre-licensing education
- Pass a qualification exam (includes both a state and national component)
- Pass a background check
- Complete at least eight hours of continuing education on an annual basis
Requirements for federally chartered mortgage loan originators
- Pass a qualification exam (made up of both a state and national component)
- Pass a background check
- Complete at least eight hours of continuing education on an annual basis
The
SAFE Act provided a subject matter breakdown of the minimum
federal requirements for both
pre-licensing and continuing education.
Pre-licensing education (minimum of 20 hours) must include:
- 3 hours of federal law and regulations
- 3 hours of ethics, this shall include instruction on fraud, consumer protection and fair lending issues
- 2 hours of training related to lending standards for the nontraditional mortgage product marketplace
- 12 hours of undefined instruction on mortgage origination
Annual continuing education (minimum of 8 hours) must include:
- 3 hours of federal law and regulations
- 2 hours of ethics that shall include instruction on fraud, consumer protection and fair lending issues
- 2 hours of training related to lending standards for the nontraditional mortgage product market
- 1 hour of undefined instruction on mortgage origination
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