What is the SAFE Act?

In 2008, the federal government enacted the Housing and Economic Recovery Act.  Title V of this act is called the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (also known as the SAFE Act).  It establishes requirements for the licensing and registration of Mortgage Loan Originators (MLOs). A mortgage originator is defined as an individual who takes a mortgage loan application or offers or negotiates terms of a mortgage loan for compensation or gain. MLOs who work for an insured depository or its owned or controlled subsidiary, are "registered".  All other MLOs are to be "licensed" by the states. The SAFE Act requires state-licensed MLOs to pass a written qualified test, to complete pre-licensure education courses and to take annual continuing education courses. The Nationwide Mortgage Licensing System and Registry (NMLS) is the agency required to develop the test and approve pre-licensing and continuing education courses.

The SAFE Act also requires all MLOs submit fingerprints to the Nationwide Mortgage Licensing System and Registry (NMLS) for submission to the FBI for a criminal background check and state-licensed MLOs to provide authorization for NMLS to obtain an independent credit report.

Who needs to be licensed?

 Many individuals will now be required to be licensed as mortgage loan originators (MLOs) such as employees of nonprofit corporations, depository institution affiliates and agents engaged in modifications of mortgage loans held or serviced by other entitities.

Who does not need to be licensed?

Attorneys at law

Individuals making loans to the individual's immediate family

Individuals who are loan processors or underwriters

Individuals who are "registered mortgage loan originators" which include employees of insured depository regulated by FDIC, OCC, OTS, FED, NCUA or Farm Credit Administration.

Do I have to take my pre-licenser or continuing education all at once?

No, you may take multiple courses over a period of time to reach the 20 hour PE or 8 hour CE  requirements. However, continuing education only counts for the year in which it is taken so do not plan to take a course in December and then another January since the course taken in January will not count towards meeting the previous year’s continuing education requirement.

What are the Continuing Education (CE) requirements for a Mortgage Loan Originator?

License renewal will require 8 hours of continuing education.  The 8 hours must include:

3 hours - Federal Law and Regulations

2 hours - Ethics

2 hours - Non-traditional Lending

1 hour   - Virginia Law

Can I take the same continuing education course two years in a row?

No, the SAFE Act specifically prohibits the taking of the same course in successive years.

When do I need to complete Continuing Education (CE)?

CE is not required in 2009 and 2010, because MLO's are initially required to complete their Pre-Licensure Education (PE) by July 1^st, 2010. In 2011, MLO's licensed in Virginia will be required to complete their CE by December 31, 2011.

Can I receive a refund if don’t pass an exam?

Refunding a student if they do not pass the National or State component of the SAFE test would, in effect, be an implied guarantee that the student will pass a test based upon a course they have taken from the provider.  NMLS approved course provider marketing policies prohibit a course provider from guaranteeing a student that they will pass a test based upon a course they have taken with them.

How do I obtain an ID# with NMLS?

Go to the NMLS web site at: http://www.stateregulatoryregistry.org/AM/Template.cfm?Section=Navigation_Guide for the Guide "Getting Started: Mortgage Loan Originator" on how to obtain your NMLS ID#.

TESTING FAQs

What are the details of the National and State tests?

The pre-education testing requirement will be administered by a NMLS approved test provider and the test will measure the applicant’s knowledge and comprehension in the subject areas of ethics and state/federal mortgage laws and regulations. The pre-licensing education test is separated into a national and Virginia-specific component.   Applicants and licensees must attain a test score of at least 75% correct answers in each of the test components.

Test Component

# Questions

Alloted Time

Cost

National

100 (90 scored, 10 unscored)

150 minutes + 30 minutes for tutorial

$92.00

State

65   (55 scored, 10 unscored)

90 minutes + 30 minutes for tutorial

$69.00

Do I need to pass the National Component of the test more than once if I would like to be licensed in more than one state?

No, the National Component of the test need only be passed once, unless an individual is unlicensed for a period of five years or more.  Additionally, once a candidate has passed any test component, the candidate cannot retake that particular test component.

If I work for a Commercial Bank do I need to take the SAFE test?

If you work for an insured depository regulated by OCC, OTS, FDIC, FED and NCUA or the Farm Credit Administration you are not required to take the SAFE test.  You still can and may want to take the SAFE test in the event that you change employment and work for a state-licensed lender or broker.

I've selected and paid for an enrollment window, but the enrollment period does not start right away. Why does my enrollment window only open several days or weeks into the future?

Typically the enrollment window begins with the current date. However, if the selected test is available for scheduling, but is not yet being administered, the enrollment window start date will be the first date the test is offered. Also, if a candidate has recently failed the specified test, the new enrollment window will start on the first date after the required waiting period.

What should I bring with me to the test center?

You must bring one form of a current (non-expired) government-issued identification that includes your photograph and signature.

Can I bring a calculator and/or scratch paper into the test center?

The testing center will provide scratch paper and a basic calculator.

Are we allowed to take restroom breaks during the test?

Yes, restroom breaks are permitted. However, the test clock will not stop while you are taking a break, and as a result, your test time will be shortened.

What am I allowed to bring into the test center?  

No personal items are permitted to be brought into the test center. This includes but is not limited to: cell phones, pagers, purses, wallets, coats, hats, etc. All of these items must be locked in a secure locker upon arrival. Also, no food or drink is permitted in the test center.

How will the tests be scored?  

All of the tests will be graded/scored electronically. Once a candidate has finished taking a test component, the candidate's score (percentage correct) and test result (pass/fail designation) will appear on the screen. And before departing the test center, a printed score report will be presented to the candidate by the test center administrator. NMLS will post the official version of the results to the Testing Information section under the Composite View.

What score do I need to get to pass the test?  

By law, all MLOs seeking state-licensure, or currently holding a state license, are required to pass both the national and state components of the S.A.F.E. Mortgage Loan Originator Test with a score of 75% or better on each component.

Why are there un-scored questions on the test?

The ten pre-test (un-scored) questions appearing on the National Component and each State Specific Component do not affect the candidate's score or the pass/fail result. These pre-test questions are being pilot tested for future use. Once these pre-test questions are tested on a sufficiently large sample of candidates, these questions will reviewed to determine if they meet appropriate test standards to be considered for use as scored test questions on future NMLS tests.

Do I need to take a course prior to taking one of the tests?

No, you are not required to take a pre-licensure or continuing education course prior to taking either the National Component or the Unique State Component of the test. However, a course is strongly encouraged as it will help prepare you take and pass the test.  Regardless of whether you choose to complete a preparation course prior to taking a specific test, you are still required to complete the 20 hours of pre-licensure education and/or required to complete 8 hours of annual continuing education.

Who are the Test Providers?

Prometric

Pearson Vue