Mortgage SAFE Act and MLO Licensing Questions and Answers

Question 1

An individual works for a state-licensed mortgage lender.
Their primary duties involve collecting and packaging loan application documents for the MLO and communicating with the borrower to request follow-up items like pay stubs and bank statements.
They do not offer or negotiate loan rates or terms.
According to the SAFE Act, which of the following is true?

Accepted Answer

This individual is acting as a loan processor and is not required to be a state-licensed MLO.

Answer

This individual must be a state-licensed MLO because they communicate with the borrower.

Answer

This individual is exempt from licensing as long as they are a W-2 employee of the lender.

Answer

This individual must obtain a federal registration through the NMLS but not a state license.

Question 2

Which of the following correctly identifies the minimum pre-licensing education (PE) topic requirements for a state-licensed MLO under the SAFE Act?

Accepted Answer

3 hours federal law, 3 hours ethics, 2 hours non-traditional lending, 12 hours electives

Answer

3 hours federal law, 2 hours ethics, 3 hours non-traditional lending, 12 hours electives

Answer

2 hours federal law, 3 hours ethics, 3 hours non-traditional lending, 12 hours electives

Answer

3 hours federal law, 3 hours ethics, 3 hours non-traditional lending, 11 hours electives

Question 3

A mortgage loan originator has been properly licensed in their state for five consecutive years. For their upcoming annual continuing education (CE), they find a course with the exact same title and NMLS course number as one they completed last year. Which SAFE Act rule applies to this situation?

Accepted Answer

The MLO is prohibited from taking the same approved course in successive years.

Answer

The MLO can retake the course since they have been licensed for more than three years.

Answer

The MLO must get special permission from the state regulator to retake the course.

Answer

The MLO can take the course, but will only receive half of the credit hours.

Question 4

Under the SAFE Act, which of the following is a key distinction between a state-licensed MLO and a registered MLO?

Accepted Answer

State-licensed MLOs work for non-depository institutions, while registered MLOs work for depository institutions like banks or credit unions.

Answer

Registered MLOs must complete more hours of annual continuing education than state-licensed MLOs.

Answer

Only state-licensed MLOs are required to have a unique identifier through the NMLS.

Answer

Registered MLOs must pass a state-specific component of the national exam, while state-licensed MLOs do not.

Question 5

A state licensing agency is reviewing an application for a new MLO license. Which of the following findings would be grounds for denying the license under the minimum standards of the SAFE Act?

Accepted Answer

A felony conviction for fraud that occurred 5 years ago.

Answer

A foreclosure on a personal property that was finalized 8 years ago.

Answer

A misdemeanor conviction for a traffic violation last year.

Answer

A collection account on the applicant's credit report.

Question 6

According to the SAFE Act and its implementing regulations, when must a Mortgage Loan Originator provide their NMLS unique identifier to a consumer?

Accepted Answer

Upon request, before acting as an MLO, and in their initial written communication with the consumer.

Answer

Only upon the consumer's request.

Answer

Only on the final Closing Disclosure.

Answer

Only on business cards and other advertising materials.