1.1 SAFE Act Education Requirements
The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) requires that state-licensed mortgage loan originators (MLOs) complete pre-licensure and annual continuing education.
- 3 hours of federal law and regulations;
- 3 hours of ethics, this 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; and
- 12 hours of undefined instruction on mortgage origination.
- 3 hours of federal law and regulations;
- 2 hours of ethics that shall include instruction on fraud, consumer protection, and fair lending issues;
- 2 hours of training related to lending standards for the nontraditional mortgage product market; and
- 1 hour of undefined instruction on mortgage origination.
It should be noted that the SAFE Act’s requirement for state-licensed MLOs to complete 20 hours of pre-licensure education and 8 hours of annual continuing education is a minimum standard and that individual States, through the passage of their own SAFE legislation, may require MLOs to complete a greater number of hours of education as a condition to be licensed in that state. Additionally, for the 12 hours of undefined instruction (commonly referred to as “electives”), a state may also require that a certain number of those hours be state-required instruction. The same requirement may also apply for the 1 hour of undefined instruction required for annual continuing education.
The following scenarios are examples for how pre-licensure education could potentially be configured:
Scenario 1: State A
State A may require the minimum SAFE Act requirements of 3 hours of federal law, 3 hours of ethics, 2 hours of nontraditional mortgage lending and 12 hours of electives for a total of 20 hours.
Scenario 2: State B
State B may require the minimum SAFE Act requirements of 3 hours of federal law, 3 hours of ethics, 2 hours of nontraditional mortgage lending, 4 hours of state-specific mortgage law (taken from the 12 hours of undefined electives), and 8 hours of electives for a total of 20 hours.
Scenario 3: State C
State C may require the minimum SAFE Act requirements of 3 hours of federal law, 3 hours of ethics, 2 hours of nontraditional mortgage lending and 12 hours of undefined electives, plus an additional four hours of state-specific mortgage lending law for a total of 24 hours.
Scenario 4: State D
State D may require the minimum SAFE Act requirements of 3 hours of federal law, 3 hours of ethics, 2 hours of nontraditional mortgage lending, and 3 hours of state-specific mortgage industry regulation (taken from the 12 hours of undefined electives), 9 hours of electives, plus an additional four hours of state-specific mortgage lending law for a total of 24 hours of education.