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SAFE Act and MLO Licensing Flashcards

7 cards from real Mortgage practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 SAFE Act and MLO Licensing flashcards as text

  1. Under the SAFE Act, which of the following is TRUE about the pre-licensure education requirement?

    Answer: An instructor teaching a SAFE Act course may NOT use those hours toward their own education

    Under the SAFE Act, an instructor teaching a pre-licensure education course cannot use those hours to satisfy their own pre-licensure or continuing education requirements.

  2. A company hires an independent contractor to originate mortgage loans. Under the SAFE Act, this individual must:

    Answer: Obtain a state MLO license because independent contractors do not qualify for the depository institution exemption

    Independent contractors must obtain their own state MLO license and cannot rely on an employer's license or the depository institution exemption.

  3. The SAFE Act requires the NMLS to function as a repository for MLO information. Which data element is NOT typically stored in NMLS?

    Answer: MLO's personal tax returns

    NMLS stores criminal background results, credit reports, and employment history, but personal tax returns are not required to be submitted to or stored in NMLS.

  4. An MLO licensed in State A wants to originate a loan for a borrower purchasing property in State B, where the MLO is not licensed. What must the MLO do?

    Answer: Obtain a license in State B before originating the loan

    MLOs must be licensed in the state where the property is located, not just the state where they or the borrower reside.

  5. Which of the following best describes a 'registered' MLO versus a 'licensed' MLO under the SAFE Act?

    Answer: Registered MLOs are employees of federally regulated depository institutions; licensed MLOs work at non-depository institutions

    Registered MLOs are employees of federally regulated depository institutions who register through NMLS, while licensed MLOs work at non-depository institutions and must obtain a state license.

  6. Under the SAFE Act, what is the minimum passing score on the SAFE Mortgage Loan Originator Test?

    Answer: 75%

    Applicants must achieve a score of at least 75% to pass the SAFE MLO national test component.

  7. Which statement about the SAFE Act's background check requirement is CORRECT?

    Answer: Applicants must submit fingerprints for an FBI criminal history check through NMLS

    SAFE Act applicants must submit fingerprints through the NMLS for an FBI criminal history background check as a mandatory part of the licensing process.