SAFE (Secure and Fair Enforcement Mortgage Licensing Act of 2008)

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) requires licensed mortgage loan originators (MLOs) in each state complete 8 hours/year of approved Nationwide Mortgage Licensing System & Registry (NMLS) continuing education.

Is it working to get clean MLOs? Some say Mortgage Fraud is more prevalent now than in the boom/bust periods – but did the SAFE Act do anything to help reduce mortgage fraud or sleezy practices? I don’t know.

Update 9-9-2011:  SAFE is causing alot of confusion and possible complexity. Definition isn’t clear of what is meant by “licensing requirements” because HUD and each State Banking Department, who blame each other or not defining, can’t define it clearly enough.  Source:

Licensing Loan Originator – ok, but seriously – Isn’t this another example of the US Federal government being too little too late – again?

This Act started in 2008 is still going on, but is changing hands.  The Housing and Urban Development (HUD) office has just issued its final ruling/interpretation of the Act, but is going to be passing many of the decisions onto the Consumer Financial Protection Bureau (CFPB) — which may never be funded if left up to the Republicans—

So will this legislation solve any problems?  Probably some, but not others, and not necessarily the right problems.  It is one piece of the puzzle, but the shape and dimensions of the puzzle keep changing.

Note:  You can see from licensing real estate agents that it has “completely cleared up any shenanigans that agents perform and their misbehavior – right?

Yes, we had unscrupulous loan originators, but if they couldn’t turn and sell them to Fannie, Freddie and others at the drop of a hat, then someone else would have created and sold the same loans to the secondary market.

Maybe we should license the Federal Government and put them on notice or fine them for any misbehavior?




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