Mortgage Career

The Purpose of SAFE Legislation

The SAFE Legislation or the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 was passed on July 30, 2008. This federal legislation provided a time allotment of one year for each individual state to pass their own legislation to ensure the licensure of mortgage loan originators meet national standards. The legislation includes mandate to state agencies to participate in the Nationwide Mortgage Licensing System and Registry (NMLS), the organization that administers the SAFE MLO Exam.

The SAFE Act is predominantly designed to enhance consumer protection and reduce consumer and institutional fraud through the setting of standards, protocol, and process for the licensing and registration of state-licensed mortgage loan originators.

The Purpose of the SAFE MLO Exam

The Nationwide Mortgage Licensing System or NMLS is the registrar who administers the SAFE MLO Test for aspiring Mortgage Loan Originators or MLOs. The NMLS are the body responsible for assuring that major aspects of the SAFE Legislation, as regards the standards and licensure of MLOs are enhanced and that SAFE MLO Exam questions and format reflect the rigor and demands and the professional acumen regarded as necessary for the industry and the role.

Here are the objectives of the SAFE Legislation and SAFE MLO Exam as detailed in Chapter 51 of SAFE, Title 12, 5101:

  • Providing uniform license applications and reporting requirements for state licensed-loan originators;
  • Providing a comprehensive licensing and supervisory database;
  • Aggregating and improving the flow of information to and between regulators;
  • Providing increased accountability and tracking of loan originators;
  • Streamlining the licensing process and reducing regulatory burden;
  • Enhancing consumer protections and supporting anti-fraud measures;
  • Providing consumers with easily accessible information, offered at no charge, utilizing electronic media, including the Internet, regarding the employment history of, and publicly adjudicated disciplinary and enforcement actions against, loan originators;
  • Establishing a means by which residential mortgage loan originators would, to the greatest extent possible, be required to act in the best interests of the consumer;
  • Facilitating responsible behavior in the subprime mortgage market place and providing comprehensive training and examination requirements related to subprime mortgage lending;
  • Facilitating the collection and disbursement of consumer complaints on behalf of state mortgage regulators.


The SAFE Legislation and the SAFE MLO Test have been the calculated catalysts of change as set forth in the SAFE Act of 2008. The SAFE objectives contain a myriad of changes and additions to protocol and the SAFE MLO Exam represents a formidable standardization of the academic rigor required to attain MLO status. The purpose of the legislation, the exam, and the NMLS have received new credence, credibility, and capability to succeed in the objective: assure consumers against fraud and devious lending practices.