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Secure and Fair Enforcement for
Mortgage Licensing
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Compliance Commentary: HUD's SAFE Act Final Rule
On June 30, 2011, the U.S. Department of Housing and Urban Development (HUD) published the long-awaited final rule
under the Secure and Fair Enforcement Licensing Act of 2008 (SAFE Act). Despite the fact that all states, jurisdictions
and territories, including DC, PR, Guam and Virgin Islands, already have laws and regulations in place under the SAFE
Act – as well as the Banking Agencies for Financial Institutions – HUD is responsible for setting minimum standards for
licensing via this rule, requirements for the Nationwide Mortgage Licensing System and Registry (NMLSR), and was
originally slated for oversight responsibility. As of July 21, 2011, the responsibility for oversight will fall under the
authority of the Bureau of Consumer Financial Protection (CFPB) due to the Dodd-Frank Act. HUD received 5,132
comments in response to the proposed rule.
In crafting each state version of the SAFE Act, and with many state level exceptions, the states mostly followed the
model SAFE Act legislation developed jointly by NMLSR, the Conference of State Bank Supervisors (CSBS) and the
American Association of Residential Mortgage Regulators (AARMR). All states must meet the minimum standards set
forth in this rule and also have the right to enact additional laws and rules for its own purposes. It is expected that there
will be additional state law and regulation amendments following publication of this rule.
read more...
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SAFE Mortgage Licensing Act of 2008
Title V of P.L. 110-289, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed
on July 30, 2008. The new federal law gave states one year to pass legislation requiring the licensure of mortgage loan
originators according to national standards and the participation of state agencies on the Nationwide Mortgage
Licensing System and Registry (NMLS). The SAFE Act is designed to enhance consumer protection and reduce fraud
through the setting of minimum standards for the licensing and registration of state-licensed mortgage loan. Mortgage
loan originators who work for an insured depository or its owned or controlled subsidiary that is regulated by a federal
banking agency, or for an institution regulated by the Farm Credit Administration, are registered. All other mortgage
loan originators 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 SAFE Act also requires all MLOs to submit fingerprints
to the Nationwide Mortgage Licensing System (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.
Click HERE for more details
S.A.F.E. Act FAQs
NMLS S.A.F.E Act Compliance Blog
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