MLO Exam Cheat Sheet — SAFE Act Quick Reference
Everything you need to memorize for the NMLS SAFE MLO exam in one printable quick-reference guide. RESPA, TILA, ECOA, HMDA, Fair Housing, QM rules, and key formulas.
RESPA — Real Estate Settlement Procedures Act
Regulation X · 12 U.S.C. § 2601–2617
- Section 3: Borrower must receive a Special Information Booklet within 3 business days of application
- Section 4: Good Faith Estimate (now Loan Estimate under TRID) required within 3 business days
- Section 5: Seller cannot require buyer to use a specific title insurance company
- Section 6: Loan servicer must respond to qualified written requests within 30 days
- Section 8: Prohibits kickbacks, fee-splitting, and unearned fees for settlement services
- Section 9: Seller cannot require buyer to purchase title insurance from a specific company
- Section 10: Limits escrow account deposits to 2 months of cushion beyond annual obligations
- Affiliated Business Arrangement: Must disclose, borrower can choose alternative, no required use
- Marketing Service Agreement (MSA): Must provide actual services; cannot be a disguised referral fee
TILA — Truth in Lending Act
Regulation Z · 15 U.S.C. § 1601–1667f
- Regulation Z implements TILA — applies to consumer credit transactions
- Loan Estimate must be provided within 3 business days of application (6 data points trigger)
- Closing Disclosure must be provided at least 3 business days before consummation
- Right of rescission: 3 business days for refinances on primary residences (not purchase loans)
- APR tolerance: re-disclosure required if APR changes >1/8% (fixed) or >1/4% (ARM)
- Advertising triggers: If specific credit terms are advertised, full disclosures required (Reg Z trigger terms)
- Trigger terms in ads: payment amount, number of payments, finance charge, down payment amount
- Higher-Priced Mortgage Loan (HPML): APR exceeds APOR by 1.5% (first lien) or 3.5% (subordinate)
- HOEPA/High-Cost Mortgage: APR exceeds APOR by 6.5% (first lien) or 8.5% (subordinate), or points/fees >5%
ECOA — Equal Credit Opportunity Act
Regulation B · 15 U.S.C. § 1691–1691f
Prohibits discrimination in any aspect of a credit transaction based on:
Key: Adverse action notice must be sent within 30 days of application, stating specific reasons for denial (or the right to request reasons).
HMDA — Home Mortgage Disclosure Act
Regulation C · 12 U.S.C. § 2801–2810
- Home Mortgage Disclosure Act — requires reporting of mortgage data to detect discrimination
- Regulation C implements HMDA
- Applies to banks, savings associations, credit unions, and mortgage companies meeting thresholds
- Must report: applications received, loans originated, loans purchased, and applications denied
- Data collected: race, ethnicity, sex, income, loan amount, property location, loan type, action taken
- Loan Application Register (LAR) submitted annually to regulators
- Purpose: detect lending discrimination and ensure community credit needs are met
- Modified LAR available to the public (personal identifiers removed)
Fair Housing Act
42 U.S.C. § 3601–3619
Prohibits discrimination in the sale, rental, and financing of housing based on 7 protected classes:
Tip: Remember "CR RN SFD" — Color, Religion, Race, National origin, Sex, Familial status, Disability. Compare with ECOA which adds marital status, age, and public assistance but does NOT include familial status or disability.
Dodd-Frank / Qualified Mortgage (QM) Rules
Dodd-Frank Wall Street Reform · ATR/QM Rule
- Ability-to-Repay (ATR): Lender must verify borrower can repay the loan (8 underwriting factors)
- ATR factors: income/assets, employment, monthly payment, other loan payments, other obligations, DTI, credit history, and monthly payments on simultaneous loans
- Qualified Mortgage (QM): Provides safe harbor or rebuttable presumption of ATR compliance
- General QM: DTI ≤ 43% (or meets GSE/government standards), no risky features
- QM prohibited features: no negative amortization, no interest-only, no balloon (with exceptions), term ≤ 30 years, points and fees ≤ 3% of loan amount
- Temporary QM (GSE Patch): Loans eligible for purchase by Fannie Mae or Freddie Mac
- Small Creditor QM: For lenders with <$2B assets, allows balloon features in rural areas
- CFPB (Consumer Financial Protection Bureau): Enforces Dodd-Frank consumer protection provisions
- Loan Originator Compensation: Cannot be based on loan terms or conditions (except loan amount)
SAFE Act — Licensing Requirements
Secure and Fair Enforcement for Mortgage Licensing Act of 2008
- SAFE Act = Secure and Fair Enforcement for Mortgage Licensing Act of 2008
- Requires MLOs to be either state-licensed or federally registered through NMLS
- State-licensed MLO: Works for non-depository institutions (mortgage companies, brokers)
- Federally registered MLO: Works for depository institutions (banks, credit unions)
- Pre-license education: 20 hours minimum (3 federal law + 3 ethics + 2 non-traditional + 12 electives)
- Continuing education: 8 hours annually (3 federal law + 2 ethics + 2 non-traditional + 1 elective)
- Must pass SAFE MLO exam with 75% or higher score
- Criminal background check and credit report required through NMLS
- Unique identifier (NMLS number) assigned to each MLO — must appear on all loan documents and advertising
- Felony conviction in past 7 years (or any financial crime) = automatic disqualification
- License must be renewed annually; 30-day grace period for CE completion
Key Mortgage Formulas
Must-know calculations for the MLO exam
Loan-to-Value (LTV)
LTV = Loan Amount ÷ Property Value (or Appraised Value)
Example: Home value $400,000, loan $320,000 → LTV = 320,000 ÷ 400,000 = 80%
Combined LTV (CLTV)
CLTV = (1st Mortgage + 2nd Mortgage) ÷ Property Value
Example: $300K first + $50K HELOC on $400K home → CLTV = 350,000 ÷ 400,000 = 87.5%
Front-End DTI
Housing DTI = Monthly Housing Payment (PITI) ÷ Gross Monthly Income
Example: PITI $2,000, income $6,000/mo → DTI = 2,000 ÷ 6,000 = 33.3%
Back-End DTI
Total DTI = Total Monthly Debts ÷ Gross Monthly Income
Example: Total debts $2,580, income $6,000/mo → DTI = 2,580 ÷ 6,000 = 43%
Discount Points
1 Point = 1% of Loan Amount
Example: 2 points on $300,000 loan = 0.02 × $300,000 = $6,000
Monthly P&I Payment
Monthly P&I = (Loan Amount ÷ 1,000) × Monthly Factor
Example: $250,000 loan, factor 6.32/1000 → (250,000 ÷ 1,000) × 6.32 = $1,580/mo
Down Payment
Down Payment = Purchase Price × Down Payment %
Example: Purchase $350,000, 20% down → $350,000 × 0.20 = $70,000
Loan Amount
Loan Amount = Purchase Price − Down Payment
Example: Purchase $350,000, down $70,000 → Loan = $280,000
Why Use an MLO Exam Cheat Sheet?
The SAFE MLO exam covers a vast amount of material across federal laws, state regulations, mortgage products, and mathematical formulas. A well-organized cheat sheet helps you consolidate the most testable information into a quick-reference format that strengthens recall during your final review sessions. While you cannot bring notes into the Prometric testing center, studying from a cheat sheet before exam day is one of the most effective last-minute preparation strategies.
This cheat sheet covers the eight most heavily tested areas on the NMLS exam: RESPA prohibited practices, TILA disclosure timelines, ECOA and Fair Housing protected classes, HMDA reporting requirements, Dodd-Frank QM rules, SAFE Act licensing requirements, and essential mortgage math formulas. Bookmark this page and review it regularly as part of your study routine.
Frequently Asked Questions
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