Which federal law governs mortgage loan originators?

The Secure and Fair Enforcement for Mortgage Licensing Act, commonly known as the SAFE Act, is the federal law that specifically governs mortgage loan originators. It was enacted to enhance consumer protection and reduce fraud by establishing minimum standards for the licensing and regulation of mortgage loan originators.

The SAFE Act requires that MLOs be licensed and registered with the Nationwide Multistate Licensing System and Registry (NMLS). This establishes a uniform licensing process and promotes accountability in the mortgage industry. The act also mandates that MLOs undergo background checks, complete pre-licensure education, and pass a national examination. By doing so, it ensures that individuals working in this capacity possess the necessary knowledge and ethical standards to effectively assist consumers in obtaining mortgage loans.

This focus on regulating the behavior and qualifications of mortgage loan originators distinguishes the SAFE Act from other laws mentioned, which serve different purposes. The Truth in Lending Act primarily addresses disclosures related to credit terms to promote informed decision-making by consumers, while the Real Estate Settlement Procedures Act focuses on the transparency of closing costs in real estate transactions. The Home Ownership and Equity Protection Act is geared towards protecting consumers in high-cost mortgage transactions by imposing additional requirements on lenders. Each of these laws plays an important role in consumer protection within the