On July 30th, 2008 the President signed the Housing and Economic Recovery Act of 2008 into law to help stabilize the housing market and encourage stability in the financial system. Title V of the Act, the Secure and Fair Enforcement (S.A.F.E.) for Mortgage Licensing Act of 2008, establishes that any residential mortgage originator must be either State–licensed by August 1st, 2009, or federally registered. In addition, every loan originator has to register with the NMLS (Mortgage Licensing System and Registry). This requirement was put in place to increase uniformity and reduce fraud. (For the full text of the SAFE act please go to http://www.csbs.org/AM/Template.cfm?Section=SAFE_Act)

What are the education requirements established by the new law? In addition to having to meet a number of licensing requirements (see the full SAFE Act text for details), mortgage originators will now be required to:

• Pass a national mortgage test with a score of 75% or better. The test will include:
  • Ethics
  • Federal law and regulation
  • State law and regulation
  • Federal and state law and regulation pertaining to fraud, consumer protection, nontraditional mortgages and fair lending
• Take 20 hours of pre – licensing education courses approved by NMLSR. The education must include:
  • 3 hours of federal law and regulation
  • 3 hours of ethics, including fraud, consumer protection and fair lending
  • 2 hours of standards on non-traditional mortgage lending
  • 12 hours you will be able to pick from a selection of courses
• Take eight hours of continuing education annually, including:
  • 3 hours of federal law and regulation
  • 3 hours of ethics, including fraud, consumer protection and fair lending
  • 2 hours of standards on non-traditional mortgage lending

It is important to point out that the law only establishes minimum standards on the federal level. The individual state requirements in addition to this federally mandated minimum will vary by state. According to the current plans, the states have until August 1st, 2009 to devise a plan for meeting these education requirements.

As you can see, while the law will go a long way toward helping devise uniform standards for loan originators and protecting the consumer, there are still a number of open points that need to be determined. Until there is more clarity from the various legislative agencies, we advise our customers to continue to comply with the rules and regulations that are currently in place for the states they are licensed in, by taking the appropriate state- specific coursework that is available through Mortgage-Education.com.

Mortgage-Education is staying in close touch with the regulators and the individual state agencies to ensure that we can provide our customers with the most up to date information on how to stay fully compliant with the fast-changing requirements. Our coursework covers all the topics that we expect to see as part of the new SAFE standard and we are working to ensure we are responding quickly to any new or additional standards.

If you have any additional questions about SAFE, or about how we can help you stay up to date with all of the relevant coursework in these changing times please email us at info@mortgage-education.com