A Complete Guide To The SAFE Mortgage Licensing Act

safe mortgage licensing act

If you have been involved in the mortgage industry recently, you probably have been exposed to the SAFE Mortgage Licensing Act. You might have even been to exposed to it without even knowing it.

So what is the SAFE Act, really? If you are involved in the mortgage industry, you’ll want to know.

What is The SAFE Act?

The Secure and Fair Enforcement for Mortgage Licensing Act (“SAFE Act”) is the federal response to the mortgage meltdown of 2008. The Act was created to establish minimum standards for licensing and regulation of mortgage loan originators to enhance consumer protection and reduce fraud.

The Act became effective in July 2008.  Since July 21, 2011, the Consumer Financial Protection Bureau (CFPBF) has managed and enforced the Act.

The Act clarifies the following:

  • Residential mortgage loan originators must be licensed and covered under a mortgage surety bond or recovery fund obligation and be either state-licensed or federally registered.
  • Every mortgage loan originator must also:

    • Pass a written qualified test
    • Complete pre-licensure education courses
    • Take continued education courses
    • Submit fingerprints for a criminal background check during licensure
    • Submit a credit report during licensure
  • Mortgage companies need to have a financial responsibility built into their state licensing system that meets national definitions and minimum standards, that include, among other things:
    • Criminal history and background checks
    • Pre-licensure education
    • Pre-licensure training
    • Continuing education

For a summary of all the SAFE mandates, view this resource.

What is the Purpose of The SAFE Act?

The SAFE Mortgage Licensing Act is designed to enhance consumer protection and reduce fraud.

The SAFE Act establishes minimum standards for licensing and registration of mortgage loan originators, Conference of State Bank Supervisors (CSBS), and the American Association of Residential Mortgage Regulators (AARMR).

The objectives of the SAFE Act include:

  • Aggregating and improving the flow of information to and between regulators
  • Providing increased accountability and tracking of MLOs
  • Enhancing customer protection
  • Supporting anti-fraud measures
  • Proving consumers with easily accessible information regarding the employment history and enforcement actions against MLOs at no charge

Effects of the SAFE Act

Since it was passed in July of 2008, the SAFE Act created a lot of changes, many relating to certain bond requirements.

One change was the addition of tiered bonding requirements. This requirement states that as mortgage companies grow and create a larger volume of loans, so too does their surety bond amount need to increase. 

The SAFE Mortgage Licensing Act also created the NMLS (Nationwide Mortgage Licensing System). NMLS consolidates mortgage licensing information in one place and has become a repository for all nationwide licensing in the mortgage industry.  

Common Questions Regarding the SAFE Act

#1: Where can I view the final rule?

#2: What are the Federal Registration requirements of the SAFE Act?

Individual residential mortgage loan originators employed by agency-regulated institutions must:

  • Register with the Registry (NMLS) and maintain their registration
  • Obtain a unique identifier through the Registry
  • Provide their MLO identifier to consumers

Agency-regulated institutions must:

  • Require their employees who are mortgage loan originators to comply with these requirements
  • Adopt and follow written policies and procedures to assure compliance with the requirements

#3: Are there any exemptions to the SAFE Act?


Exempt: Any employee of a covered financial institution who has never been registered or licensed through the NMLS as an MLO if, during the past 12 months, acted as an MLO for 5 or fewer residential mortgage loans.

#4: Where can I get federally registered?

To register, you can visit the NMLS registry.

#5: Where can I get a mortgage bond as described in the SAFE Act?

To get a mortgage bond, per the SAFE Act’s requirements, first make sure you need a surety bond.

Find your state’s bond amount

Then, if you need a surety bond, see how much that bond would cost you.

Surety Solutions knows the mortgage industry and has over 50 years of bonding experience. We’ve created a one-click software program that generates free mortgage bond quotes, free of charge, with no obligation to buy. 

To get your free mortgage bond quotes, click below.

Get free Mortgage Bond quotes

Other Questions?

  • You can submit a SAFE Act inquiry to the CFPB by e-mailing to CFPB_SAFEAct_Inquiries@cfpb.gov.
  • If you are a consumer or mortgage loan originator with questions regarding the SAFE Act and state licensing requirements, you should contact the mortgage regulatory agency in your state.

Related links:

SAFE Mortgage Licensing Act of 2008 – NMLS

SAFE Mortgage Licensing Act of 2008 – HUD

Other helpful resources:

CFPB SAFE Act Rule –SAFE Act Rule as republished by the Consumer Financial Protection Bureau

HUD SAFE Act Rule –SAFE Mortgage Licensing Act: Minimum Licensing Standards and Oversight Responsibilities

State SAFE Legislation Chart


CSBS/AARMR Letter to HUD –Letter from CSBS/AARMR to HUD regarding licensing requirements for mortgage servicers

Federal Registration of MLOs

MLO SAFE Deadlines & Requirements

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