An individual takes residential mortgage applications for a nonbank mortgage broker and is not covered by an exemption. Under the SAFE Act framework, what authorization is generally required?
Correct Answer
D) A state MLO license and registration through NMLS
Why this is correct: The SAFE Act mandates that individuals who take residential mortgage loan applications and offer/negotiate terms for compensation must be licensed or registered. For nonbank mortgage brokers (non-depository institutions), the general requirement is state licensure. This includes registration in the Nationwide Multistate Licensing System (NMLS). Why the other choices are wrong: Federal registration solely because the work involves mortgages is incorrect; federal registration typically applies to MLOs employed by banks, thrifts, or credit unions. No authorization if compensation is salary is false; the SAFE Act applies regardless of compensation structure (salary, commission, etc.) if the activities define the person as an MLO. Only the broker company's NMLS ID is wrong because the individual MLO must have their own license and NMLS registration; the company ID is separate. Exam tip: Nonbank MLO = state license. Bank MLO = federal registration. Compensation type does not create an exemption.
Why This Is the Correct Answer
Why this is correct: The SAFE Act mandates that individuals who take residential mortgage loan applications and offer/negotiate terms for compensation must be licensed or registered. For nonbank mortgage brokers (non-depository institutions), the general requirement is state licensure. This includes registration in the Nationwide Multistate Licensing System (NMLS). Why the other choices are wrong: Federal registration solely because the work involves mortgages is incorrect; federal registration typically applies to MLOs employed by banks, thrifts, or credit unions. No authorization if compensation is salary is false; the SAFE Act applies regardless of compensation structure (salary, commission, etc.) if the activities define the person as an MLO. Only the broker company's NMLS ID is wrong because the individual MLO must have their own license and NMLS registration; the company ID is separate. Exam tip: Nonbank MLO = state license. Bank MLO = federal registration. Compensation type does not create an exemption.
More UST Questions
In a pricing desk question, an audit analyst sees facts tied to Prohibited Misrepresentation. What should the file reflect?
An applicant previously had an MLO license revoked by a state regulator. Under the SAFE Act minimum standards for a new state-licensed MLO license, which statement is correct?
Which statement correctly distinguishes a license suspension from a license revocation?
A state regulator has issued an order suspending an MLO's authority effective immediately. The MLO has filed an appeal, but no stay has been granted. What should the MLO do?
An MLO license application asks whether the applicant has been the subject of a regulatory order. The applicant has a recent consent order that falls within the question. What is the proper response?
Why does NMLS maintain licensing and enforcement information that participating regulators can access?
A regulator issues a final license suspension without giving the MLO notice of the alleged violation or any opportunity to respond, even though applicable law requires both. What issue is presented?
A regulator finds that an MLO charged consumers prohibited fees. Which set of actions is consistent with the enforcement tools contemplated by Regulation H?
An MLO's license status in NMLS changes to suspended, with no stay or reinstatement shown. What is the immediate operational effect?
Which fact most directly supports disciplinary action against an MLO rather than merely a request for additional application information?
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