SAFE Act Flashcards
General purpose of the SAFE Act
Prohibits individuals from engaging in the business of a residential mortgage loan originator without first obtaining and maintaining annual registration as a registered MLO and a unique identifier
What does SAFE Act stand for?
Secure and Fair Enforcement for Mortgage Licensing Act
Documents to be filed for public review under the SAFE Act
- MLO license application
- Background checks
- Disciplinary actions
- Company filings
- Surety bond info
- Consumer complaints
Regulatory powers and responsibilities
Federal govt: TILA, RESPA and Dodd-Frank
State: responsible for consumer protection, investigations of allegations, audits and enforcement of legal action (may impose additional state-specific requirements)
What does NMLS stand for?
Nationwide Mortgage Licensing System and Registry
NMLS registry
Creates a system of identification and tracking for the purposes of compliance and examination
Frequency of exams
Evaluated and determined by CFPB
MLO unique identifiers
Eases the ability of supervision, compliance and transparency by being able to track activities for specific companies or people. Allows for uniformity across states.
CFPB authority and CFPB Loan Originator Rule
- Aka dual compensation
- CFPB has the authority to conduct exams of supervised entities to ensure compliance with Federal Regulations
Dual compensation penalties
Tier 1: maximum $5,437
Tier 2 : maximum $27,186 (recklessness)
Tier 3: maximum $1,087,450 (knowingly committing an act)
MLO-licensed services
- Accepting residential mortgage loan applications
- Involvement in the negotiation of the terms of a residential mortgage loan
- Advertise the acceptance of mortgage loan application
Allowable activities by underwriters, clerical staff and loan processors
