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NMLS-Approved Loan Originator: Licensing

Frequently Asked Questions

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Loan Originator Licensing FAQs
General    (click an item to see more info)
  1. Is the Real Estate Institute an NMLS-approved provider?

    Yes. The Real Estate Institute is an NMLS-Approved Course Provider, #1400102 We offer NMLS-approved pre-license and continuing education programs. We also offer SAFE test preparation courses to prepare loan originators for the mandatory national and state licensing tests.

    Last Updated: 1/28/2012

  2. What is the SAFE Act?

    The Secure and Fair Enforcement Mortgage Licensing Act was signed into law on June 30, 2008. This law, more commonly referred to as the "SAFE Act", was enacted in order to increase uniformity, reduce regulatory burden, enhance consumer protection, and reduce fraud in the mortgage industry.

    Last Updated: 1/28/2012

  3. What is the NMLS?

    The SAFE Act requires that all mortgage loan originators have an account with the Nationwide Mortgage Licensing System & Registry (NMLS). The NMLS is responsible for maintaining information about mortgage loan originators (individuals) and Mortgage Brokers (companies) throughout the country.

    Last Updated: 11/10/2011

  4. To Whom does the SAFE Act apply?

    The SAFE Act applies to all new and existing mortgage loan originators.

    Last Updated: 4/25/2010

  5. Under the SAFE Act, exactly who is considered to be a "Mortgage loan originator"?
    The SAFE Act, as implemented by rule, defines an "individual loan originator" as an individual who, for compensation or other monetary gain, performs loan origination activities, such as
    • Taking an application./li>
    • Arranging a credit transaction.
    • Assisting a consumer in applying for credit. A loan originator assists a consumer in obtaining or applying for credit by advising on particular credit terms that are or may be available to the consumer based on the consumer's financial characteristics.
    • Offering or negotiating credit terms. Credit terms include rates, fees and other costs. Credit terms are selected based on the consumer's financial characteristics when those terms are selected based on any factors that may influence a credit decision, such as debts, income, assets or credit history.
    • Making an extension of credit.
    • Referring a consumer to a loan originator or creditor. Referring is an activity included under each of the activities of offering, arranging, or assisting a consumer in obtaining or applying to obtain an extension of credit.
    • Advertising or communicating to the public that you can or will perform any loan origination services.
    The Consumer Financial Protection Bureau (CFPB) has further clarified that an individual cannot avoid licensure requirements by having someone else "take" the application. CFPB also clarified the limited contexts where offering or negotiating residential mortgage loan terms would not make an individual a mortgage loan originator:
    • Performing only administrative or clerical tasks on behalf of a loan originator or creditor, such as processing or underwriting, provided you perform those services for only one organization at a time.
    • Delivering an application to the consumer for them to fill out and not discussing terms, etc.
    • Providing financing to a buyer pursuant to a sale of your own residence.
    • Performing only real estate brokerage services as a licensed real estate professional as long as you are not being compensated by a lender for offering products or referrals.
    • Providing third-party advisory services, such as an attorney, accountant, financial advisor or someone assisting an immediate family member, as long as you are not being compensated for the actual loan origination service or for referring clients to a specific creditor or broker.
    • Other assorted situations, such as employees of manufactured home builders in certain cases.

    Last Updated: 1/19/2014

  6. Does this law affect mortgage loan originators in all states?

    Yes. This law applies to all states, territories, and possessions of the United States.

    Last Updated: 11/10/2011

  7. Are there any mortgage loan originators who are NOT required to become licensed?

    Yes. Mortgage loan originators who are employees of a FDIC insured bank or savings and loan, its subsidiary, or an institution regulated by the Farm Credit Administration are exempt from the state licensure, and testing requirements. However, they must receive education commsurate with their involvement in loan origination. Although not specifically required to take NMLS-approved courses, those can certainly satisfy the requirements of the Act.

    Last Updated: 1/19/2014

  8. What is the difference between NMLS registration and licensing?

    All mortgage loan originators must have an account with the NMLS. This is intended to create a centralized national database of disciplinary information for individuals originating residential loans.

    Registration is the only SAFE Act requirement for mortgage loan originators who are employees of a FDIC insured bank or savings and loan, its subsidiary, or an institution regulated by the Farm Credit Administration.

    For all other mortgage loan originators, including those working for Mortgage Brokers and Mortgage Lenders, the SAFE Act also requires state licensure for each state where the individual originates loans. The licensure process will be facilitated through the NMLS and its systems. State-licensed mortgage loan originators are subject to the education and testing requirements of the SAFE Act.

    Some states require additional education beyond the base requirements contained within the federal SAFE Act.

    Last Updated: 11/10/2011

  9. How do I become registered with the NMLS?

    The NMLS is an official system used to record information for state regulators. It is important that you coordinate your use of this system with your employer.

    Detailed instructions are provided at the NMLS Website.

    Last Updated: 5/25/2012

  10. Is NMLS registration also required for Mortgage Brokers and Lenders (companies)?

    Yes, in addition to individual mortgage loan originators, a mortgage brokerage or mortgage lending company will create a record in the NMLS system. Using this "One Record Concept", NMLS allows for the creation and maintenance of a single record for each company, regardless of the number of jurisdictions in which it is licensed.

    This single record may be used to apply for, maintain, renew, or surrender licenses in all jurisdictions participating in NMLS. Companies will also be able to create and maintain a single record for each branch, control person or mortgage loan originator.

    The use of any of these forms is governed by the regulations of the state in which you are seeking licensure, not by NMLS.

    Additional information is available at the NMLS Website.

    Last Updated: 1/19/2014

  11. Will states issue a Mortgage loan originator license once I'm registered with the NMLS?

    Yes, however individuals are required to satisfy education, testing, and background check requirements before applying for a state license.

    Last Updated: 4/25/2010

  12. After becoming registered with the NMLS, what steps are required to become licensed in an individual state?

    Requirements for individual state licensure are dictated by each state’s mortgage licensing law. However, certain requirements exist for all states, and the licensing process will be standardized and facilitated through the NMLS.

    Requirements include:

    • Background checks
    • Testing
    • Pre-license education
    • Continuing education

    Please check the NMLS website for updated information about individual state requirements.

    Last Updated: 11/10/2011

  13. Where can I find additional information about NMLS licensing procedures for a specific state?

    Please see this document at the NMLS website.

    Last Updated: 1/19/2014

Background Check Requirement    (click an item to see more info)
  1. What types of background checks are required?

    Individuals must submit to criminal history and credit report checks.

    Last Updated: 4/25/2010

  2. When must I submit to the required background checks?

    Before applying for state licensure.

    Last Updated: 4/25/2010

  3. How do I submit to the background checks? Who do I contact?

    You will find this information at the NMLS Website.

    Last Updated: 5/25/2012

Testing & Education Requirements    (click an item to see more info)
  1. In brief, what are the NMLS education and testing requirements?

    Applicants are required to:

    • Pass a standardized national examination.
    • Pass a standardized state examination.
    • Complete 20 hours of pre-license course curriculum.
    • Complete 8 hours of continuing education course curriculum each calendar year.

    Please continue to review our FAQs for more detailed information about the above requirements. Some exceptions apply.

    Last Updated: 11/10/2011

  2. If I work for a commercial bank do I need to take the education courses or examinations required by the SAFE Act?

    If you work for an insured depository regulated by OCC, FDIC, FED and NCUA or the Farm Credit Administration you are not required to take the NMLS Approved pre-license or continuing education courses or examinations.

    You still must receive education commensurate with your origination involvement and the relevant NMLS-approved pre-license and continuing education courses can satisfy this requirement. Additionally, it would be a good idea if you have ever considered changing employment and going to work for a state-licensed lender or broker.

    Last Updated: 1/19/2014

Additional Information    (click an item to see more info)
  1. Where can I find additional information about NMLS licensing procedures for a specific state?

    Please see this document at the NMLS website.

    Last Updated: 1/19/2014

  2. Where can I get more information about the NMLS?

    The NMLS website is a valuable resource: http://Mortgage.NationwideLicensingSystem.org

    Last Updated: 4/25/2010

  3. I have more questions. Who can I call?

    Our customer representatives at the Real Estate Institute are available to help.
    Please call us with your questions: (800) 995-1700.

    The NMLS Call Center is also available: (855) NMLS-123 (1-855-665-7123).

    Last Updated: 1/19/2014

Loan Originator Pre-License Education FAQs
General    (click an item to see more info)
  1. Is Real Estate Institute an NMLS-approved course provider?

    Yes. The Real Estate Institute is an NMLS-Approved Course Provider, #1400102. We offer NMLS-approved pre-license and continuing education programs.

    We also offer SAFE test preparation courses to prepare loan originators for the mandatory national and state licensing tests.

    Last Updated: 7/17/2012

  2. Exactly what pre-license education is required by the SAFE Act?

    The SAFE Act requires that the 20 hours of pre-license education shall include:

    • 3 hours of Federal law and regulations
    • 3 hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues
    • 2 hours of training related to lending standards for the nontraditional mortgage product marketplace. HUD has acknowledged that "nontraditional mortgage product" means any mortgage product other than a 30 year fixed rate mortgage
    • 12 hours of other instruction on mortgage origination

    Some states may have additional requirements. See the NMLS Website for details.

    Last Updated: 11/10/2011

  3. Is self-study permitted for pre-license courses?

    No. NMLS-approved pre-license courses must be offered as classroom courses, Classroom Equivalent Courses (such as live webinars), or Online Instructor Led Courses (a comprehensive, interactive online course similar to those offered at online universities).

    Last Updated: 4/25/2010

  4. Do I need to complete the pre-license course requirement before taking the SAFE examination(s)?

    No. You must complete the pre-license course requirement and pass the exam(s), but you may do so in either order.

    Last Updated: 4/25/2010

  5. Will your pre-license courses help prepare me for the mandatory SAFE examination?

    Yes, but keep in mind that NMLS-approved schools are required to include specific topics in a comprehensive pre-license course. The mandatory SAFE exam (national component) covers much of the same inforamtion (about 80%), but also includes test questions on additional subjects. After completing our pre-license course, we recommend that our students study for the SAFE exam using our PREP-to-PASS program to ensure they are prepared to answer questions on all subjects covered in the SAFE exma.

    Last Updated: 7/17/2012

  6. If I attend the webinar, will I be able to interact with the instructor (and get my questions answered)?

    Yes. Our live webinar course is truly interactive. Our instructors consistently receive compliments from our students, who don't always expect to find the instructor so accessible when attending a webinar program.

    Last Updated: 7/17/2012

  7. Will you report my course completion to the NMLS?

    Yes. As an NMLS-approved course provider, we electronically report all pre-license and continuing education course completions.

    Although we promptly submit this data, the NMLS typically requires up to five business days to process this information and update your licensing record. You may not be able to view the course completion using their website until this process is complete.

    Last Updated: 7/17/2012

Real Estate Institute is an NMLS-Approved Course Provider, #1400102.