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(858) 605-0952 NMLS ID: 365482 BRE: 01779147

The SAFE Act: Why does it exist?

Homeowners chose to refinance their property for many different reasons. However, the refinance process can be time-consuming and tedious. To many, it might be difficult to trust someone with such an important task. The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) is what helps us know that all licensed loan officers have the same knowledge and training. This law was passed on July 30th 2008 under Title V of the Housing and Economic Recovery Act (HERA). The HERA is a crucial housing law with duties to oversee; the modernization of the Federal Housing Administration, consumer protection, and the prevention of foreclosure. Read below to get a better understanding of the SAFE Act and see how it helps to keep consumers protected.

The purpose of the SAFE Act

So what exactly is the purpose of the SAFE Act? It serves to protect consumers by enforcing safe and regulated mortgage licensing. In fact, the SAFE Act implemented pre-licensing, nationwide testing, and annual continuing education. This act requires a mortgage loan originator to be licensed under the Nationwide Mortgage Licensing System and Registry (NMLS). You can take a look at the NMLS resource center for news and events, licensing requirements by state, and professional standards online. The SAFE Act is also great for the mortgage industry because it allows licensees to be monitored by regulators. This can help to prevent any unfair practices in the mortgage industry. It can also ensure consumers that they are being treated fairly.


An MLO must pass a national exam, with a score of 75% or better to get his or her license. Before the final exam, a 20 hour course of of pre-licensing is required. This course explains different loan programs that are available, laws, and ethical practices. Furthermore, each year an 8 hour re-certification is required. With new laws being made every year, it’s important for an MLO to stay up to date on all laws and regulations. If an MLO fails to re-certify, they will have to repeat the whole process over again. The course and exam helps to ensure that all MLO’s are learning the same information. Moreover, all loan officers must pass a credit and criminal background check. It is impossible for a loan officer to get their license if they have committed any financial crimes.

The Safe Act allows consumers to work with experienced loan officers on their home finance goals. With this nationwide licensing and registration system, the mortgage industry will continue to grow by protecting consumers from fraud.


Jason Vondrak

Company President

Prospect Financial Group

948 Garnet Avenue

San Diego, CA 92109

NMLS: 349089 | BRE: 01837707

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