Mortgage SAFE Act and MLO Licensing 4

Question 1

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

Accepted Answer

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

Answer

An applicant may teach a pre-licensure course and count the hours toward their own requirement

Answer

Courses must be completed within 3 years before submitting a license application

Answer

Online courses are prohibited; all education must be classroom-based

Question 2

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

Accepted Answer

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

Answer

Register as a federal employee under the NMLS registry

Answer

Operate under the sponsoring company's license without their own

Answer

Only register if originating more than 5 loans per year

Question 3

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

Accepted Answer

MLO's personal tax returns

Answer

Criminal background check results

Answer

Credit report information

Answer

Employment history

Question 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?

Accepted Answer

Obtain a license in State B before originating the loan

Answer

Proceed under State A's license since the borrower is their client

Answer

Apply for a temporary interstate license waiver from HUD

Answer

Register as a federal MLO to bypass state licensing

Question 5

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

Accepted Answer

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

Answer

Registered MLOs work at non-bank lenders; licensed MLOs work at banks

Answer

Registered MLOs have higher education requirements than licensed MLOs

Answer

Registered MLOs are supervised by state regulators; licensed MLOs by federal regulators

Question 6

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

Accepted Answer

75%

Answer

70%

Answer

80%

Answer

85%

Question 7

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

Accepted Answer

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

Answer

Only state criminal records are checked; federal records are excluded

Answer

Background checks must be renewed every 2 years

Answer

Background checks are optional if the applicant provides notarized character references