Federal Mortgage Laws
24%of exam
Uniform State Content
11%of exam
Mortgage Knowledge
20%of exam
Origination Activities
27%of exam
Ethics
18%of exam
FraudFair LendingUDAAPAdvertisingKickbacks
Quick Facts
- Exam
- SAFE MLO
- Items
- 120 total; 115 scored
- Time
- 190 min
- Pass
- 75%
- Fee
- $110
- PE
- 20 hours
- Delivery
- Prometric
- Retake
- 30/30/180 days
Domain Weights
24 Federal, 11 State, 20 Mortgage
27 Origination18 Ethics100 total
TILA vs RESPA
TILA
- Credit cost
- APR
- Rescission
RESPA
- Settlement costs
- Kickbacks
- Escrow
Credit terms vs settlement
Federal Laws
- RESPA
- Settlement cost protection
- TILA
- Credit cost disclosure
- ECOA
- Credit discrimination ban
- Fair Housing
- Housing discrimination ban
- FCRA
- Credit report rules
- HMDA
- Mortgage data reporting
- GLBA
- Financial privacy
- BSA/AML
- Suspicious activity reporting
ECOA vs Fair Housing
ECOA
- All credit
- 9 classes
- Adverse action
Fair Housing
- Housing transactions
- 7 classes
- HUD enforcement
Credit vs housing
Federal Timelines
- Loan Estimate
- 3 business days
- Closing Disclosure
- 3 days before closing
- Rescission
- 3 business days
- Adverse action
- 30 days
- QWR ack
- 5 business days
- QWR response
- 30 business days
- Escrow cushion
- 2 months max
- FCRA dispute
- 30 days
Agencies
- CFPB
- Consumer finance rules
- HUD
- Housing enforcement
- NMLS
- Licensing registry
- State regulator
- License discipline
- Fannie Mae
- Conventional GSE
- Freddie Mac
- Conventional GSE
- FHA
- HUD insurance
- USDA
- Rural housing
MLO Education
3 Fed, 3 Ethics, 2 Nontraditional
12 electives20 PE total8 CE yearly
Licensing
- Pre-license
- 20 hours
- Federal law
- 3 PE hours
- Ethics
- 3 PE hours
- Nontraditional
- 2 PE hours
- Continuing ed
- 8 hours yearly
- NMLS ID
- Required identifier
- Sponsorship
- Company control
- Temporary authority
- 120 days max
LTV vs DTI
LTV
- Collateral risk
- Loan/value
- PMI driver
DTI
- Repayment risk
- Debts/income
- ATR factor
Property vs borrower
Product Picker
- Stable payment→Fixed-rate
- Initial low rate→ARM
- Veteran buyer→VA
- Low credit/down→FHA
- Rural eligible→USDA
- Senior equity→HECM
- Large loan→Jumbo
- Equity draw→HELOC
Products
- Fixed-rate
- Stable payment
- ARM
- Index plus margin
- Balloon
- Large final payment
- Interest-only
- Payment shock risk
- HELOC
- Revolving equity line
- HECM
- Reverse mortgage
- FHA
- Government insured
- VA
- Veteran benefit
QM vs Non-QM
QM
- ATR safe harbor
- No risky features
- Fee caps
Non-QM
- No safe harbor
- Flexible docs
- Higher risk
Protected vs flexible
Underwriting
- ATR
- Repay ability verified
- QM
- Safe-harbor mortgage
- DTI
- Debts over income
- LTV
- Loan over value
- CLTV
- All liens/value
- AUS
- Automated underwriting
- Appraisal
- Independent value opinion
- Title
- Ownership/lien evidence
Calculations
- P&I
- Principal plus interest
- PITI
- Housing payment
- Escrow
- Taxes plus insurance
- Discount point
- 1% loan amount
- APR
- Finance-cost rate
- DTI
- Monthly debts/income
- LTV
- Loan/value
- Buydown
- Temporary rate reduction
TRID Clock
LE early; CD before closing
LE: 3 daysCD: 3 daysReset: APR/product/penalty
LE vs CD
LE
- Early estimate
- 3 days after
- Shopping tool
CD
- Final terms
- 3 days before
- Closing tool
Estimate vs final
Disclosure Picker
- Application received→Loan Estimate(3 days)
- Closing scheduled→Closing Disclosure(3 days prior)
- Refi principal home→Rescission notice(TILA)
- Affiliate referral→AfBA disclosure(RESPA)
- Credit denial→Adverse notice(ECOA)
- Servicing transfer→Transfer notice(RESPA)
- Credit used→FCRA notice(Report source)
- Rate locked→Lock agreement(Pricing)
Origination Docs
- 1003
- Uniform loan application
- Income
- Ability support
- Assets
- Funds verified
- Credit report
- History and debts
- Intent proceed
- Fees allowed
- Rate lock
- Pricing promise
- Title report
- Lien review
- Insurance
- Collateral protection
TRID Tolerances
- Zero tolerance
- Lender-controlled fees
- 10% bucket
- Selected third parties
- No tolerance
- Borrower-selected fees
- Changed circumstance
- Valid LE reset
- APR increase
- New wait trigger
- Product change
- New CD wait
- Prepay penalty
- New CD wait
- Good faith
- Estimate standard
Fraud Flags
Identity, income, occupancy, assets
Verify docsEscalate SARAvoid pressure
Kickback vs Compensation
Kickback
- Referral value
- Unearned fee
- RESPA violation
Compensation
- Actual service
- Reasonable payment
- Documented work
Referral vs service
Compliance Picker
- Referral payment→RESPA check
- Protected class→Fair lending
- Credit pull→Permissible purpose
- Suspicious funds→SAR escalation
- Consumer data→GLBA safeguards
- Ad trigger term→TILA disclosures
Fraud + Ethics
- UDAAP
- Unfair/deceptive/abusive
- Steering
- Pushing unsuitable loan
- Redlining
- Area-based denial
- Straw buyer
- False purchaser
- Occupancy fraud
- False residence intent
- Appraisal pressure
- Independence violation
- Kickback
- Referral thing-of-value
- Bait-switch
- Misleading terms
Common Traps
Total items changed
120 total current ≠ 115 scored
Estimate vs final
LE estimates ≠ CD finalizes
Login vs license
NMLS registers ≠ State licenses
APR vs note rate
APR includes fees ≠ Note excludes fees
Referral vs work
Kickbacks prohibited ≠ Services payable
Rescission scope
Refi principal home ≠ Not purchase loan
Last Minute
- 1.Official test: 120 total
- 2.Pass = 75% scored
- 3.Origination highest: 27%
- 4.RESPA bans referral fees
- 5.TILA = APR/rescission
- 6.ECOA = adverse action
- 7.LE early; CD final
- 8.LTV property; DTI borrower
- 9.20 PE; 8 CE
- 10.NMLS ID on ads
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