The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (called the SAFE Mortgage Licensing Act of 2008) requires state-licensed mortgage loan originators (MLOs) to fulfill a set of state and federal licensing requirements with the Nationwide Mortgage Licensing System (NMLS). The goal is to reduce fraud, protect consumers, and ensure the public welfare.

In addition to other requirements, all MLOs need to file a Form MU4 through NMLS with the their state’s Division of Banking. All MLOs must pass the SAFE Mortgage Loan Originator Test, which is comprised of two components: a state component and a national component. MLOs must pass each component with a score of 75% or higher prior to renewal for 2011.

Let’s say that you have begun the process. You’ve spoken with your company; determined if you or your company is going to create and submit your record in NMLS; and created an account at NMLS. You’ve reviewed the jurisdiction-specific requirements for the state in which you are using NMLS.

It is individual state law that determines when a state-licensed MLO is required complete pre-licensure or continuing education training, pass the SAFE Mortgage Test, and complete his or her background checks. You should refer to your State Licensing Requirements for information about schedules for completing each of the professional requirements.

Here are the basic requirements for MLO compliance.

Criminal Background Check

You need to submit your fingerprints. NMLS processes MLO fingerprints for the purpose of obtaining a federal criminal background check (CBC) through the Federal Bureau of Investigation. MLOs can authorize a single federal background check as part of a filing to one or more states. The criminal history record information check response from the FBI will be attached to the mortgage loan originator’s NMLS record.

Fingerprinting is a four-step process:

  1. Log in to your NMLS account and request a federal CBC.
  2. Obtain your PIN.
  3. Each state has NMLS-approved fingerprinting vendors. Make an appointment and have your fingerprints captured.
  4. Your fingerprints are automatically processed, and the results are reported back to NMLS and available to relevant regulators.

The fees are $39.00 (CBC Processing Fee or Paper Card Capture) plus a $10.00 Fieldprint Card Packet Fee, totaling $49.00.

Education

The SAFE Act requires that state-licensed MLOs complete Pre-licensure Education (PE) and annual Continuing Education (CE). A list of NMLS-approved courses available from approved course providers is available in the Master Course Catalog.

Not all courses are available in all geographic areas. If you can’t find what you need, check back frequently as it will be several months before NMLS has courses approved in all states and territories. Many courses are available online.

Testing

The MLO Testing Handbook will guide you through the SAFE Test. You can download it at the NMLA Resource Center:

http://mortgage.nationwidelicensingsystem.org/profreq/testing/Pages/default.aspx

The guide reviews the entire testing process and can help you as you go through these steps:

  1. Select and pay for a test enrollment window.
  2. Find a test center near you and schedule a testing appointment.
  3. Prepare for the test and take the test.
  4. View your test scores in NMLS.

There are two fees for the SAFE Act Mortgage Loan Originator Test. The national component is $92; and each unique state component is $69 (may vary; check with your state).

Credit Report

The NMLS states that beginning in 2010, as a part of the licensure process, the agency intends to provide functionality within the system to process independent credit reports from a consumer reporting agency.

David