The Impact of the
Secure and Fair Enforcement (S.A.F.E.) for Mortgage Licensing Act of 2008

On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act of 2008, a significant component of mortgage reform. This comprehensive act addresses many topics, however, I'd like to highlight one particular section of Title V of this act, called the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (also known as the S.A.F.E. Mortgage Licensing Act of 2008). The S.A.F.E. Mortgage Licensing Act establishes national minimum standards for mortgage training – both pre-licensing and continuing education.

As the national leader in mortgage education, TrainingPro has been actively involved as this law has come to fruition. We have closely followed its development and became the only education provider to contribute language to the bill, which ultimately became law. We are maintaining the highest level of involvement in this process to make sure our clients stay informed and compliant.

The purpose of this site is to maintain our role as your education resource and provide answers to the questions you may have regarding this new law. Below are updates, highlights of the law, and several answers to questions we have received.

If you have further questions you would like to see answered on this web site, feel free to email them to compliancewatch@trainingpro.com . We hope you enjoy this site!

Best Regards,

Christopher D. Nickerson

CEO TrainingPro

TrainingPro is Prepared to Support Requirements of the S.A.F.E. Mortgage Licensing Act

On July 30, 2008, President Bush signed into law the Housing and Economic Recovery Act of 2008, a significant component of mortgage reform. Part of this act is the establishment of minimum standards for mortgage pre-licensing and continuing education as well as a testing requirement for mortgage professionals across the country. The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (known as the S.A.F.E. Act) addresses these upcoming changes.

TrainingPro is reaching out to its valued clients to ensure you that our position during this transition is strong, informed and prepared. We are in a unique situation because of our long-standing history in the mortgage education industry, strong relationships with industry players and our national scope. As the national leader in mortgage education, TrainingPro is absolutely, 100% ready to serve the industry’s needs during this transition to new and changing training requirements. 

TrainingPro is Involved

There is a lot of buzz about the S.A.F.E. Act. TrainingPro has been actively involved to ensure our clients stay informed and compliant. Our clients have come to expect this level of service from us, and we will continue to maintain this high level of involvement! TrainingPro:

• Followed closely the legislative process and helped to shape the language of the bill that became the Housing and Economic Recovery Act of 2008.
• Attended the American Association of Residential Mortgage Regulators (AARMR) convention in Minneapolis in August 2008 and met with key individuals responsible for the execution of this law.
• Launched one of the premier informative S.A.F.E. Education online resources found at www.TrainingPro.com/Law in October 2008 to help introduce the industry to changes imposed by the S.A.F.E. Act. We update this page often to keep our clients informed of new roll-out developments. If you have not seen the site yet, please take a moment to view our updates.
• Joined state regulators, mortgage compliance officers, and CSBS/AARMR members at the NMLS User Conference and Training held in New Orleans in February 2009.  We learned more about the launch of this national registry and were available to attendees to answer questions and provide insight from an education provider perspective.
• Distributes a monthly e-newsletter, Compliance Watch, to opt-in subscribers interested in updates on various states’ initiatives to roll-out the S.A.F.E. Act.

TrainingPro is Prepared

Our keen awareness and involvement has been essential to TrainingPro’s preparation for the launch of the S.A.F.E. Act. Our industry expertise and extensive history educating the nation’s mortgage professionals allowed us to quickly develop course material aligned with the topic requirements set forth in the S.A.F.E. Act. We are proud to announce that our S.A.F.E.- specific course, S.A.F.E. Compliance, Safe Business, Safe Borrower is now approved for mortgage continuing education in 9 states:

• Arkansas
• Florida
• Illinois
• Iowa
• Kentucky
• Maine
• North Carolina
• South Dakota
• Washington

This course has been submitted to every state for approval, and we will continue to keep you informed as more states approve TrainingPro’s mortgage continuing education course: S.A.F.E. Compliance, Safe Business, Safe Borrower.

Note: The process for submitting courses for continuing education credit to the national approving body of the NMLS has not yet been established. Once this process is in place, TrainingPro’s courses will be submitted for credit through the NMLS approving body. Credit is currently only available based on individual state approvals.

What’s Next?

The Conference of State Bank Supervisors (CSBS) recently released its final national and state S.A.F.E. Mortgage Loan Originator Test Content Outline. This outline shows the topics that will be tested for both the national and state exams. The national exam is set to be released July 31, 2009. Twelve states are already working on their state exams. These states are being called the Fast-Track states and include AZ, ID, IA, LA, MA, MI, NH, NC, PA, RI, VT, and WA.

TrainingPro’s “S.A.F.E. Mortgage Loan Originator National Test Guide” is currently being finalized and will be available in the short-term. Enjoy the benefits of TrainingPro’s online courses – quality, convenience, and cost-effectiveness! This course offers a review of:

• Mortgage laws
• General mortgage knowledge
• Mortgage loan origination activities
• Ethics

For over a decade it has been TrainingPro’s mission to serve the mortgage industry with higher standards, personal care and hassle-free approaches to training. We look forward to our continued relationship with you as we lead the way through this significant mortgage industry milestone.

Please feel free to contact TrainingPro with any questions you may have about the S.A.F.E. Act or our course material – 1-877-878-3600.

TrainingPro Attends NMLS User Conference to Learn More About S.A.F.E. Act  

TrainingPro joined state regulators, mortgage compliance officers, and CSBS/AARMR members at the NMLS User Conference and Training held February 10-12 in New Orleans. Agenda items included learning the basics of the NMLS system, reviewing the regulatory and industry benefits of the system, presenting testing and education requirements based on the S.A.F.E. Mortgage Licensing Act, learning about NMLS system enhancements and its future direction. Attendees were also invited to participate in open forums about this new initiative for mortgage education and licensing.

The S.A.F.E. Mortgage Licensing Act of 2008 sets federal minimum standards for mortgage pre-licensing and continuing education. The Act also enforces a national exam that all mortgage loan officers must pass prior to becoming licensed. FINRA/Pearson Vue has been selected to implement the testing and education requirements. 

The national test component is scheduled for delivery July 30, 2009. The national test will include, but is not limited to the following content areas:

• Ethics
• Federal law and regulations pertaining to mortgage origination
• Federal law and regulation, including: instruction on fraud, consumer protection, non-traditional mortgage marketplace and fair lending issues

State portions of the national exam will be conducted separately from the national exam and will either be a uniform state test or a unique state test, depending on individual states. State exams will test a candidate's knowledge of state law and regulation pertaining to mortgage origination including fraud, consumer protection, the non-traditional mortgage marketplace and fair lending issues.

Pearson Vue will provide over 500 testing facilities nationwide. Test content will be developed by subject matter experts that the NMLS will recommend from across state jurisdictions. Content outlines and test items will be comprehensively reviewed through a series of virtual meetings with practitioners and educators representing a wide range of professional perspectives.

Currently, mortgage pre-licensing and continuing education courses are being reviewed and approved by state entities. The expectation is that the Pearson Vue Education Management System (PULSE) will be used to manage course submission and approval for the NMLS approving bodies. The anticipated timeline is as follows:

• Pre-Licensing Courses: Beginning July 30, 2009 the state-by-state phase-in schedule will begin and will last no later than December 31, 2010
• Continuing Education Courses: The state-by-state phase-in schedule will begin in 2009, and will continue through 2010 and 2011.

The timeline for S.A.F.E. Act education requirements is expected to be the following:

• Establish guidelines and standards - 1^st quarter of 2009
• Begin initial approval process - 2^nd quarter 2009
• Begin operations - 3^rd quarter 2009

TrainingPro courses are fully compliant with the topic requirements set forth in the S.A.F.E. Act. We are completely prepared to remain at the forefront of the mortgage education and testing processes to ensure our clients maintain compliance with requirements that may potentially change in several states.

FINRA/Pearson VUE Approved to Implement S.A.F.E. Requirements  

The State Regulatory Registry (SRR), a subsidiary of the Conference of State Bank Supervisors (CSBS), announced on January 23 the selection of the vendors tasked to carry out the education and testing requirements found in the S.A.F.E. Mortgage Licensing Act. The Financial Industry Regulatory Authority, Inc. (FINRA) and its subcontractor Pearson VUE will implement these federal changes.

The request for proposal included management and implementation of four general sections:

• Test Development
• Test Administration
• Education Management
• Applicant and Licensee Testing and Education 

For more information on the vendors selected, please visit the CSBS website, www.csbs.org.

S.A.F.E. Act Question and Answer Section

What are the Minimum Education Standards Required through S.A.F.E.?

• The S.A.F.E. Mortgage Licensing Act establishes the minimum standards of at least 20 hours of pre-licensing education and at least 8 hours of continuing education annually for loan originators.

S.A.F.E Mortgage Licensing Act Standards
Pre-Licensing Course Topics 3 hours of federal law and regulations 3 hours of ethics (shall include fraud, consumer protection, and fair lending) 2 hours of training related to lending standards for the nontraditional mortgage product marketplace	Continuing Education Course Topics 3 hours of federal law and regulations 2 hours of ethics (shall include fraud, consumer protection, and fair lending) 2 hours of training related to lending standards for the nontraditional mortgage product marketplace

• These federal minimums are just that – federal minimum standards. States are still responsible for deciding whether to go beyond these standards. Therefore, the impact of this law is largely still state specific.

For Pre-Licensing Training, Only Eight Hours Are Mandated. What About the Other 12 Hours?

• Eight topic hours are mandated by the S.A.F.E. Act and the other 12 can be any other topics, almost treated like electives. This could vary by state, especially for states that have already met or exceeded the 20 hour requirement currently.

Do TrainingPro's Courses Meet the Requirements Set Forth in S.A.F.E.?

• Yes. TrainingPro's course curriculum is currently aligned with the requirements set forth in S.A.F.E. We have been providing instruction on all of these topics for almost a decade.

When Must the States Be Ready to Comply with This New Education Requirement?

• States that currently do not meet these minimum standards or do not currently require pre-licensing education have one year from the date of enactment (July 30, 2008) to develop their plan for meeting this requirement. States whose legislatures meet biennially, will have two years to meet this requirement.

Are Loan Originators Required to Take A S.A.F.E. Course Now?

• Students are not required to complete a federal S.A.F.E. course package at this time. Students should continue meeting the requirements set forth by each individual state. The federal course submission and approval process has not yet been determined, and the timeline for such a process is uncertain.

Are Any Education Providers Approved Through These New Federal Standards?

• No education providers have been approved to provide a federally-endorsed course. The approving bodies are not established as of yet, as well as the approval process. The Conference of State Bank Supervisors (CSBS) and individual states will likely have approving authority over course material.

What are the Details About the Required Exam?

• The S.A.F.E. Mortgage Licensing Act also requires all loan originator applicants to take an exam prior to licensure. Exam participants must pass with a 75% or higher. The test will be written by the Nationwide Mortgage Licensing System and Registry and administered by an approved test provider. An individual may retake a test three consecutive times with each consecutive taking occurring at least 30 days after the preceding test. After failing three consecutive tests, an individual shall wait at least six months before taking the test again.
• It is our understanding that an exam content outline will be available as soon as the test bank is completed. As it stands now, the federal exam will cover the mandated topics and electives. TrainingPro is pursuing the possibility of becoming a part of the exam preparation team.

Does TrainingPro Have Courses To Help Students Pass the Exam?

• TrainingPro currently has an exam prep series, which, based on our extensive knowledge of federal and state laws, we believe will be aligned with topics addressed on the exam.

Is Online Training Allowed to Meet the S.A.F.E. Requirement?

• Acceptable formats (live, online and home study) for the required training have not yet been established. This is one of the items the rule-making group will tackle. The majority of the states that currently require pre-licensing education require it to be conducted in a live class format. TrainingPro will do its best to inform federal committees of the benefits and advantages of online training.

The Federal Law Seems Vague. Will We Get More Information?

• In general, these new laws affecting the education and licensing of mortgage loan originators are vague. The specific rules to support the law are currently in development. Once these rules are finalized, TrainingPro will be fully able to guide its clients through complying with these new rules. At this point, any specific details not currently found in the legislation (and provided by other education providers) are purely speculation.

Who is in Charge of Establishing the Rules to Implement this Federal Law?

• The rule-making committee is currently made up of the vice president of education for CSBS and five state regulators. TrainingPro is urging structured participation from key industry players, such as ourselves, who have the background and experience to contribute valuable insight.

Is TrainingPro Prepared for this Education Expansion?

• TrainingPro is fully prepared to satisfy these new federal education requirements. We have the curriculum to meet the required topics, we have the relationships to provide input into this federal roll-out, and we have the resources to track and monitor further developments. We are the only mortgage education provider with a government affairs and compliance team constantly monitoring the industry and its impact on education and licensing.

Will the New SAFE Mortgage Licensing Act of 2008 Replace All of the Education Needed in Each State or In Other Words Will We Need to be Licensed at the State Level as well as the Federal Level or Will This New Act Take Care of Everything for All States?

• No, the SAFE Act will serve as the minimum standard for each state. States can continue to create their own laws and regulations that go above the minimum standards set forth by the SAFE Act.  However, for those states that chose not to create their own education requirements within one year after the enacted date of the SAFE Act, HUD will step in and become responsible for creating the education requirements.
• The SAFE Act does not mention anything about the federal government licensing mortgage professionals at the Federal level.  However, it does call for the states to join NMLSR ("National Registry") for the review of the pre-licensing education. It seems that the states have the primary responsibility to grant, approve or reject individual licensing, not the Federal government. 

View the Full Content of the S.A.F.E. Mortgage Licensing Act of 2008.