NMLS Uniform State Content 2 — Questions and Answers
Question 1: Under the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), what is the minimum number of hours of pre-licensing education required for a state-licensed MLO?
- 12 hours
- 16 hours
- 20 hours (Correct answer)
- 24 hours
Correct answer: 20 hours
The SAFE Act mandates a minimum of 20 hours of pre-licensing education for state-licensed mortgage loan originators.
Question 2: A state-licensed MLO who wants to temporarily work in a new state while their license application is pending may do so under which provision?
- Reciprocity Agreement
- Temporary Authority to Operate (Correct answer)
- Interstate Compact Clause
- Emergency Licensing Waiver
Correct answer: Temporary Authority to Operate
The SAFE Act's Temporary Authority to Operate allows eligible MLOs to work in a new state while their application is under review.
Question 3: Which of the following is NOT a component of the 20 hours of required NMLS pre-licensing education?
- 3 hours of federal law
- 3 hours of ethics
- 2 hours of nontraditional mortgage products
- 4 hours of state-specific law (Correct answer)
Correct answer: 4 hours of state-specific law
The 20-hour requirement includes 3 hours federal law, 3 hours ethics, 2 hours nontraditional products, and 12 hours of electives; state-specific hours are added on top.
Question 4: How long must a state-licensed MLO wait before retaking the NMLS National Test after failing it three consecutive times?
- 30 days
- 90 days
- 6 months
- 180 days (Correct answer)
Correct answer: 180 days
After three consecutive failures, an MLO must wait 180 days before retaking the National Test Component.
Question 5: Under the SAFE Act, which entity maintains the Nationwide Multistate Licensing System & Registry?
- The Federal Reserve
- The Conference of State Bank Supervisors (CSBS) and AARMR (Correct answer)
- HUD
- The Consumer Financial Protection Bureau
Correct answer: The Conference of State Bank Supervisors (CSBS) and AARMR
NMLS is operated by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).
Question 6: Which of the following mortgage activities would qualify an individual as a mortgage loan originator under the SAFE Act?
- Counseling a borrower on general financial literacy
- Taking a residential mortgage loan application and offering loan terms (Correct answer)
- Processing a completed loan application
- Performing a title search
Correct answer: Taking a residential mortgage loan application and offering loan terms
Taking a residential mortgage loan application or offering/negotiating loan terms for compensation makes someone an MLO under the SAFE Act.
Question 7: An MLO's NMLS license must be renewed annually. What happens if an MLO fails to meet continuing education requirements by the renewal deadline?
- They receive a 60-day grace period automatically
- Their license lapses and they must retake pre-licensing education
- Their license is placed on inactive status (Correct answer)
- They are assessed a fine but can continue originating
Correct answer: Their license is placed on inactive status
Failure to complete continuing education by the renewal deadline results in the license being placed on inactive status.
NMLS Uniform State Content 2
Under the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), what is the minimum number of hours of pre-licensing education required for a state-licensed MLO?