SAFE Act Flashcards
Secure and Fair Enforcement for Mortgage Licensing Act
When was SAFE signed into law?
A. 1945
B. 1970
C. 1902
D. 2008
Correct answer: D
D was correct as SAFE was signed into law on the 30th of July 2008, introducing a licensing requirement for those engaged in the residential mortgage loan originator (MLO) business.
What does SAFE require?
A. Mortgage lenders must become federal-registered as an MLO or state-registered.
B. That people practice safe mortgage business with an approved overseer.
C. Secure safe and fair enforcement of mortgage licenses for all house owners.
D. All of the above.
Correct answer: A
A is correct, as SAFE requires mortgage businesspersons to hold a federal
or state MLO license. This ensures a standard qualified industry with
regular education programs to allow mortgage personnel to be updated with
the latest legislation and follow correct procedures. To get a license, lenders
must pass an approved exam.
What is a residential mortgage loan originator MLO?
A. A licensed mortgage lender.
B. The original lender that works with a borrower from application open to close.
C. A person that helps a borrower get the right mortgage for real estate.
D. All of the above.
Correct answer: D
D is correct because an MLO is all of these things. They are a licensed mortgage lender, the lender that helps a borrower get a mortgage to buy a house and the one that helps them through the whole process.
What does SAFE forbid?
A. You can’t have relationships with your clients.
B. SAFE forbids mortgage lending practices without a license.
C. You can’t transfer your license from state to state.
D. A & B.
Correct answer: B
B is correct, as the ultimate aim of SAFE is to ensure that the mortgage lending profession has standards with ongoing education programs to keep everyone up to date. They also have a vetting program to help borrowers find reputable mortgage lenders.
SAFE is enforced through what?
A. The Federal Lenders Office
B. Lenders Association of America
C. Nationwide Mortgage Licensing
System and Registry
D. The Federal Government.
Correct answer: C
C is correct, as SAFE is made possible through the Nationwide Mortgage
Licensing System and Registry, where all licenses must be registered regardless of whether they are state or federally obtained.
How does SAFE improve mortgage affairs?
A. SAFE makes it easier to get business for lenders.
B. Borrowers can vet out those qualified.
C. Establish industry standards.
D. B & C
E. Make it safe for all involved in mortgage affairs.
Correct answer: D
D is correct because not only does SAFE create an industry license to become a mortgage lender, but it also has excellent standards and makes it easier for borrowers to choose lenders to help them secure a mortgage.
What is the punishment for working unlicensed?
A. Hefty fines.
B. Prison time.
C. Public shaming.
D. A lifelong ban from mortgage lending.
E. A & B.
Correct answer: E
E is correct because SAFE enforces fines for those practicing without an official license and prison time for those significant offenders. The time and amount will depend on the state of the offense committed.
