A Guide To The SAFE MLO National Test

A mortgage loan originator or officer (MLO) is a very coveted career option. You will be the person largely instrumental in enabling mortgage loans to be sanctioned to potential homebuyers. An MLO does not have the power to sanction loans. Rather, an MLO is responsible for getting all relevant financial documents from the potential borrower and processing them. The case is then presented to the lender for approving the mortgage loan.

An MLO works for banks, credit societies, or any other type of lending institution. The remuneration is typically a commission on the amount of loans sanctioned though salary plus incentives is not rare. To get into this field, you must fulfill certain eligibility norms, of which the top of the list is going through the MLO pre-licensing course and passing the SAFE MLO national test.

Click here to learn more about the SAFE MLO national test.

The SAFE (Secure and Fair Environment) Mortgage Licensing Act was passed into law in 2008. The Act requires all Mortgage Loan Originators to pass the SAFE test that is developed by the National Mortgage Licensing System (NMLS). This is a body that oversees every aspect of mortgage loan officers including the curriculum of the pre-licensing courses, passing the SAFE MLO national test, and issuing of licenses.

Every aspiring MLO in any state and jurisdiction in the USA must pass this test to qualify to get an MLO license to set up practice.

Under the SAFE Act, all potential MLOs needing a license must submit their fingerprints to NMLS which will forward it to the FBI for checking of past criminal records. This is important as MLOs are expected to maintain high moral and ethical standards and an adverse fingerprint certificate may invalidate your application for an MLO license.

Licensing Requirements by NMLS

Mortgage Loan Originators seeking a license to practice their trade in the USA must complete the pre-licensing course as approved by the SAFE Act as well as pass the SAFE MLO national test. The SAFE Mortgage Loan Originator Test is developed by NMLS. Candidates taking the test must score at least 75% to crack the exam.

A quick word on the SAFE pre-licensing course before we move on. The coursework is of 20 hours duration with various subjects as given below but you cannot choose any course provider that takes your fancy. It must be approved by the NMLS to qualify as an eligibility norm to appear for the SAFE MLO national test.

Format of the SAFE MLO National Test

The SAFE MLO national test is in a multiple-choice format with 155 scored questions and 5 unscored ones. These questions are from the major content areas listed here.

Federal Mortgage-Related Laws – 24%

Uniform State Content – 11%

General Mortgage Knowledge – 20%

ü Mortgage Loan Origination Activities – 27%

ü Ethics– 18%

If you want to be in a lucrative career as an MLO, your focus should be on passing the SAFE MLO national test.