Mortgage SAFE Act and MLO Licensing 2

Question 1

Under the SAFE Act, which entity maintains the Nationwide Multistate Licensing System (NMLS)?

Accepted Answer

The Conference of State Bank Supervisors (CSBS)

Answer

The NMLS is maintained by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR).

Question 2

An MLO applicant has a felony conviction for financial fraud from 7 years ago. Which statement is correct under SAFE Act standards?

Accepted Answer

The applicant may be denied because fraud-related felonies have no time limit for disqualification

Answer

Under the SAFE Act, felonies involving fraud, dishonesty, breach of trust, or money laundering are permanently disqualifying, with no time limit.

Question 3

What is the minimum number of hours of SAFE Act-mandated pre-licensure education that must cover federal mortgage law and regulations?

Accepted Answer

3 hours

Answer

The SAFE Act requires at least 3 hours of federal mortgage law and regulations as part of the 20-hour pre-licensure education requirement.

Question 4

Which of the following individuals is EXEMPT from SAFE Act MLO licensing requirements?

Accepted Answer

An employee of a federally chartered bank who takes loan applications

Answer

Employees of federally regulated depository institutions must register under the SAFE Act but are exempt from state licensing requirements.

Question 5

Under the SAFE Act, what must an MLO do if they move from one state-licensed company to another?

Accepted Answer

Submit a sponsorship transfer request through NMLS

Answer

When changing employers, the MLO must submit a transfer of sponsorship through NMLS, and the new employer must approve the sponsorship.

Mortgage Practice Test