NMLS Licensing and Registration 3 — Questions and Answers
Question 1: Under the SAFE Act, how many hours of continuing education must a licensed MLO complete each year?
- 6 hours
- 8 hours (Correct answer)
- 10 hours
- 12 hours
Correct answer: 8 hours
The SAFE Act requires a minimum of 8 hours of annual continuing education for state-licensed MLOs.
Question 2: Which topic is specifically mandated in the SAFE Act's 8-hour annual continuing education requirement?
- 2 hours of conventional loan product training
- 3 hours of federal law and regulations
- 1 hour of non-traditional mortgage products (Correct answer)
- 2 hours of state-specific law
Correct answer: 1 hour of non-traditional mortgage products
The SAFE Act mandates that the 8-hour CE include at least 1 hour covering non-traditional mortgage product marketplace lending.
Question 3: An MLO applies for a license in a second state while actively licensed in their home state. This is known as:
- Dual registration
- Reciprocal licensing
- Multi-state licensing (Correct answer)
- Federal pre-emption
Correct answer: Multi-state licensing
NMLS facilitates multi-state licensing, allowing an MLO to hold active licenses in multiple states through a single system.
Question 4: Which federal law formally required states to adopt minimum standards for licensing and registering MLOs?
- Dodd-Frank Act
- SAFE Mortgage Licensing Act of 2008 (Correct answer)
- Real Estate Settlement Procedures Act
- Truth in Lending Act
Correct answer: SAFE Mortgage Licensing Act of 2008
The Secure and Fair Enforcement for Mortgage Licensing (SAFE) Act of 2008 mandated that all states implement minimum MLO licensing standards.
Question 5: A federally registered MLO changes jobs from one federally chartered bank to another. What must they do in NMLS?
- Apply for a new state license within 30 days
- Update their employment record in NMLS within 30 days (Correct answer)
- Retake the national SAFE test
- Re-submit fingerprints within 10 business days
Correct answer: Update their employment record in NMLS within 30 days
Registered MLOs must update their employer information in NMLS within 30 days of changing depository institution employment.
Question 6: Which of the following criminal offenses would permanently bar someone from obtaining an MLO license under the SAFE Act?
- Any misdemeanor in the past 7 years
- Any felony in the past 10 years
- A felony involving fraud, dishonesty, or money laundering at any time (Correct answer)
- A DUI conviction within the past 5 years
Correct answer: A felony involving fraud, dishonesty, or money laundering at any time
The SAFE Act imposes a lifetime ban for felony convictions involving fraud, dishonesty, breach of trust, or money laundering.
Question 7: Which of the following best describes 'temporary authority to operate' (TAO) under the SAFE Act?
- Permission for an unlicensed individual to originate loans while studying for the SAFE test
- Permission for a licensed MLO to originate in a new state while their license application is pending (Correct answer)
- A probationary license granted to MLOs with minor disciplinary history
- A license exemption available to real estate agents who occasionally assist with loans
Correct answer: Permission for a licensed MLO to originate in a new state while their license application is pending
TAO allows qualifying state-licensed or federally registered MLOs to originate loans in a new state while their license application is under review.
NMLS Licensing and Registration 3
Under the SAFE Act, how many hours of continuing education must a licensed MLO complete each year?