Chap 8 SAFE Act

Question 1

SAFE

Answer 1

Secure and Fair Enforcement Act It was created to establish minimum standards for the regulations and licensing of mortgage loan originators. The key aim was to boost consumer protection and decrease fraud in the lending industry
Passed in July 2998 but since then has been over Consumer Financial Protection Bureau (CFPB)

Question 2

SAFE Act Features

Answer 2

Each and every MLO must be registered, licensed and covered under a mortgage surety bond.
1. Pass written exam
2. Take continuing education
3. Complete pre-licensure education courses
4. Submit credit report during the licensure
5. Criminal background check using fingerprints

Question 3

Goal of SAFE Act

Answer 3

It was created to enhance consumer protection and reduce fraud.
The SAFE ACT establishes minimum standards for licensing and registration of mortgage loan originators
The AARMR (American Association of Residential Mortgage Regulators and the Conference of State Bank Supervisors (CSBS)

Question 4

The objectives of the SAFE ACT include the following

Answer 4

1. Collecting and enhancing the flow of information to and from regulators
2. Enhance Consumer protection.
3. Providing more accountability and monitoring MLOs
4. Supporting the anti-fraud measures
5. Providing consumers with easily accessible information regarding the employment history and enforcement actions against MLOs at no charge

Question 5

Effects of the SAFE Act

Answer 5

1) Most of the changes due to SAFE Act relate to specific bond requirements.
2. One change was the addition of tiered bonding requirements. This requirement states that as mortgage companies grow and create a larger volume of loans, the amount of surety bonds also needs to increase.
3. The SAFE Mortgage Licensing Act also led to the creation of the NMLS (Nationwide Mortgage Licensing System)
4. NMLS consolidates mortgage licensing information in one location and had become repository for all nationwide licensing in the mortgage industry.