NMLS Policy on Approved and Not Approved Topic List for Pre-Licensure and Continuing Education Intended to Satisfy SAFE Act Education Requirements

Purpose

The purpose of this document is to identify the pre-licensure (PE) and continuing education (CE) topics NMLS has determined will satisfy the education requirements of the SAFE Act. The topics listed are intended to provide NMLS approved course providers guidance in developing course content. This document also identifies mortgage exam derived topics that are required to be covered as part of annual CE.

Background and Reason for this Document

In accordance with the SAFE Act, as a condition for acquiring a state-issued MLO license, individuals are required to complete 20 hours of pre-licensure education which shall include 3 hours of Federal Law, 3 hours of Ethics (which shall include fraud, consumer protection, and fair lending), 2 hours of Non-Traditional Mortgage Lending, and 12 hours of undefined education (electives). As a condition to maintain a state-issued MLO license, MLOs are required to complete 8 hours of annual continuing education which shall include 3 hours of Federal Law, 2 hours of Ethics (which shall include fraud, consumer protection, and fair lending), 2 hours of Non-Traditional Mortgage Lending, and 1 hour of undefined education (elective). In addition to the required hours as identified in the SAFE Act, state agencies can also establish additional requirements.

This document segments topics by PE and CE and is intended to reduce situations where CE is duplicative of PE. The PE section aligns with the test content outline. Topics have also been included to inform individuals new to the industry the mortgage lending process, the role of a mortgage loan originator (MLO) in that process, and of the laws and responsibility an MLO has in consumer protection.

The approved topic list includes a significant number of topics pertaining to federal and state laws and regulations. It would be a challenge for any school to provide instruction on every topic in 20 hours. Accordingly, as a condition for comprehensive course approval, not every topic is required to be included in the course content. However, this document does align with the test content outline and it is reasonable to set an expectation that passing the test will likely require more than 20 hours of instruction and that test candidates will need to have acquired a basic knowledge of each of the test content outline subject areas prior to passing the test.

In coordination with state regulators and the Multi-State Mortgage Committee (MMC), annual continuing education is required to include specific topics that have been identified as reoccurring problems on mortgage exams. It is the view of NMLS that one of the intentions of the CE requirement of the SAFE Act is to ensure MLOs stay current on issues pertaining to the accepting and negotiating terms of a residential mortgage loan application. The topics listed as “required” need to be covered in the designated calendar year. NMLS does not define how much time must be spent on each of the required topics nor is it envisioned that the topics consume the full two or three hours of ethics or federal law.