The national component of the SAFE Mortgage Loan Originator Exam consists of test questions: scored and 10 not scored, with a test time of minutes. Each state-specific component of the SAFE Mortgage Loan Originator Exam consists of 45 to 55 operational questions scored with an additional 10 pre-test not scored questions. The exam time is 90 minutes with an additional 30 minutes available for completion of an optional candidate survey and tutorial. This portion includes 25 questions, which brings the length of the National Test Component with Uniform State Content to questions.
Individuals who register under the S. Act must maintain that registration as long as they are loan originators. That includes keeping their unique identification number, which remains with them even if they change companies.
Agencies must comply with the S. Act and only employ those who are fully registered. Agencies also need to develop a written policy to ensure their use of the S. To be eligible for registration under the S. Act, the federal government requires loan originators to attend at least 20 hours of classes related to mortgage licensing. In California, originators must take the class at an institution licensed to teach it. Acceptable classes must cover mortgage laws, lending standards and ethics.
Coursework must also include at least two hours of instruction regarding California state law. Originators seeking licensure must also find someone to sponsor them. Once an mortgage originator obtains a license under the S. Accordingly, HUD will not determine that a state's legislation is not in compliance with the SAFE Act merely because the legislation or regulations provide for a reasonable period following enactment for certain loan originators to be licensed under the new requirements.
Considering the education, testing, and background check standards that license applicants must meet, HUD views a reasonable delay, with respect to individuals who do not already possess a valid loan originator license, is one which does not extend past July 31, Such a delay generally provides one year from state enactment of legislation for individuals to come into compliance with applicable requirements.
HUD has determined that all state legislatures that meet only biennially meet in , which means that these states will have the opportunity to enact SAFE Act compliant legislation by July 31, For individuals who possess licenses granted under a system that was in place prior to the SAFE Act-compliant system, HUD views a reasonable delay is one that does not extend past December 31, This effective date will accommodate individuals with two-year licenses that were granted or renewed as late as December , and also synchronizes with the NMLSR's uniform annual license expiration date of December The MSL provides in section L 1 2 for these delayed effective dates for the state licensing requirement, and provides that these effective dates could be further extended only with HUD's approval.
HUD may approve a later date only upon a state's demonstration that substantial numbers of loan originators or of a class of loan originators who require a state license face unusual hardship, through no fault of their own or of the state government, in complying with the standards required by the SAFE Act to be in the state legislation and in obtaining state licenses within one year.
Section a of the SAFE Act prohibits an individual from "engag[ing] in the business of a loan originator" without first obtaining a registration or state license. HUD interprets this provision to mean that an individual must comply with licensing and registry requirements of a state in order to engage in the business of a loan originator with respect to any residential property in that state, regardless of whether the individual or the prospective borrower is located in the state. This interpretation ensures that each state is able to establish and enforce the provisions of its SAFE Act licensing system and prevents an individual from circumventing a state's requirements simply by physically locating outside of the state and conducting business by telephone or other means.
This interpretation, however, does not affect the level of reciprocity a state may grant to another state's determination that its own SAFE Act-compliant licensing requirements have been met. This interpretation promotes clarity by unambiguously determining which state's license is required for a given transaction. Section b 2 of the SAFE Act provides that, to be eligible for a license, an individual must not have been convicted of any felony within the preceding seven years or convicted of certain types of felonies at any time prior to application.
Since the provision is triggered by a conviction, rather than by an extant record of a conviction, HUD interprets the provision to make an individual ineligible for a loan originator license even if the conviction is later expunged. Pardoned convictions, in contrast, are generally treated as legal nullities for all purposes under state law and would not render an individual ineligible. The law under which an individual is convicted, rather than the state where the individual applies for a license, determines whether a particular crime is classified as a felony.
The MSL clarifies that a pardoned conviction does not render an individual ineligible for a license under section XX. Section d 6 of the SAFE Act provides that states must set minimum net worth or surety bond requirements or establish a recovery fund paid into by loan originators.
HUD has determined that a state may comply with the SAFE Act requirement by providing that, in the case of a company that employs more than one loan originator, the bonding requirement may be met at the company level.
Individual loan originators would not have to be bonded separately. Skip to main content. Office of Hospital Facilities Why Choose ? Overview of Lean Why Choose ?
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