Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act – Overview and Summary of Requirements

• By: Staff Editor
• Date: September 30, 2011

The SAFE Act of 2008 required the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve Board, the Federal Deposit Insurance Corporation, the former Office of Thrift Supervision, the National Credit Union Administration, and the Farm Credit Administration, to jointly develop and maintain a Federal Registry for individual employees of Agency-regulated institutions who engage in the business of residential mortgage loan origination. The Agencies published a final rule regarding the registration requirements in July 2010.

• Individual residential mortgage loan originators employed by agency-regulated institutions must:
  • Register with the Registry and maintain their registration.
  • Obtain a unique identifier through the Registry that will remain with that originator, regardless of employment changes. Mortgage loan originators and their employing institutions must provide MLO unique identifiers to consumers.
• Agency-regulated institutions must:
  • Require their employees who are mortgage loan originators to comply with these requirements.
  • Adopt and follow written policies and procedures to assure compliance with the registration requirements.

• A registration as a registered loan originator
• A license and registration as a State-licensed loan originator

• The applicant should never have had a loan originator license revoked in any governmental jurisdiction.
• The applicant should not have been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court in a seven year period prior to applying for the license or be guilty of a felony act involving fraud, dishonesty, breach of trust or money laundering.
• The applicant should demonstrate financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the loan originator will operate honestly, fairly, and efficiently within the purposes of this title.
• The applicant should complete the pre-licensing education requirement
• The applicant should pass a written test that meets the test requirement
• The applicant should meet either a net worth or surety bond requirement, or paid into a State fund, as required by the State

• 3 hours of Federal law and regulations
• 3 hours of ethics which should include instruction on fraud, consumer protection and fair lending issues
• 2 hours of training related to lending standards for the nontraditional mortgage product marketplace

• Ethics
• Federal law and regulation pertaining to mortgage origination
• State law and regulation pertaining to mortgage origination
• Federal and State law and regulation, including instruction on fraud, consumer protection, the nontraditional mortgage marketplace, and fair lending issues