Mortgage Mortgage SAFE Act and MLO Licensing Questions and Answers 2 — Questions and Answers
Question 1: Under the SAFE Act, which federal agency is responsible for maintaining the Nationwide Multistate Licensing System and Registry (NMLS)?
- Consumer Financial Protection Bureau (CFPB) (Correct answer)
- Federal Housing Finance Agency (FHFA)
- Department of Housing and Urban Development (HUD)
- Federal Deposit Insurance Corporation (FDIC)
Correct answer: Consumer Financial Protection Bureau (CFPB)
The CFPB is responsible for maintaining the NMLS under the SAFE Act, having assumed this role from HUD.
Question 2: What is the minimum number of continuing education hours required annually for MLO license renewal under the SAFE Act?
- 8 hours (Correct answer)
- 12 hours
- 16 hours
- 20 hours
Correct answer: 8 hours
The SAFE Act requires MLOs to complete at least 8 hours of continuing education annually to maintain their license.
Question 3: An MLO applicant has a felony conviction from 9 years ago involving fraud. Under the SAFE Act, what is the status of their application?
- Automatically denied due to the felony involving fraud (Correct answer)
- Eligible since more than 7 years have passed
- Eligible with a waiting period waiver
- Subject to state discretion only
Correct answer: Automatically denied due to the felony involving fraud
The SAFE Act permanently bars individuals convicted of felonies involving fraud, dishonesty, or breach of trust from obtaining an MLO license, regardless of how long ago the conviction occurred.
Question 4: Which of the following activities would require an individual to be licensed as an MLO under the SAFE Act?
- Taking a residential mortgage loan application and offering loan terms (Correct answer)
- Performing purely administrative tasks such as data entry
- Providing real estate brokerage services without discussing loan terms
- Conducting a home appraisal for a mortgage lender
Correct answer: Taking a residential mortgage loan application and offering loan terms
The SAFE Act requires licensing for anyone who takes residential mortgage loan applications or offers or negotiates terms of a residential mortgage loan for compensation.
Question 5: Under SAFE Act provisions, what happens if a state-licensed MLO fails to meet renewal requirements by the deadline?
- The license lapses and the MLO must cease origination activities (Correct answer)
- The license is automatically extended for 90 days
- The MLO may continue working under a supervisor's license
- The state must provide a 60-day cure period
Correct answer: The license lapses and the MLO must cease origination activities
If renewal requirements are not met by the deadline, the MLO license lapses and the individual must immediately stop all mortgage origination activities.
Question 6: A mortgage loan originator registered with a federally regulated institution wants to move to a state-licensed mortgage company. What must they do under the SAFE Act?
- Obtain a state MLO license through the NMLS, including passing the SAFE MLO test (Correct answer)
- Simply transfer their federal registration to the state
- Notify the NMLS of the employment change only
- Work under a temporary license for 120 days while applying
Correct answer: Obtain a state MLO license through the NMLS, including passing the SAFE MLO test
Federal registration does not transfer to state licensing; the MLO must meet all state licensing requirements including passing the SAFE MLO test and completing pre-licensure education.
Mortgage Mortgage SAFE Act and MLO Licensing Questions and Answers 2
Under the SAFE Act, which federal agency is responsible for maintaining the Nationwide Multistate Licensing System and Registry (NMLS)?