Will FHA insure loans originated by Bank Loan Originators and Licensed Non-Bank Loan Originators operating under the Temporary Authority under the SAFE Act to originate loans while completing their education and testing requirements for licensing?

FHA requires Loan originators to be in compliance with the Secure and Fair Enforcement for Mortgage Licensing Act (S.A.F.E. Act).  As of November 24, 2019, the CFPB has announced that temporary authority exists to allow certain loan originators under the S.A.F.E. Act to have temporary authority to act as a loan originator in a state for a period of 120 days after the date on which the State-licensed loan originator submits the application for a state loan originator license in that state.  While operating under this temporary authority, the loan originator would not be in violation of the S.A.F.E. Act and therefore would not be operating in violation of FHA’s requirements.  Additional information can be found on the Secure and Fair Enforcement for Mortgage Licensing Act on the following Consumer Financial Protection Bureau Website at:   https://www.consumerfinance.gov/policy-compliance/guidance/mortgage-resources/secure-fair-enforcement-for-mortgage-licensing-act/ 

More information on SAFE mortgage licensing is available on the NMLS Resource Center website at https://mortgage.nationwidelicensingsystem.org/Pages/default.aspx  or by contacting the NMLS Call Center at 1-855-NMLS-123 (1-855-665-7123).

Additional information may be found on HUD's S.A.F.E. Mortgage Licensing Act of 2008 web page at https://www.hud.gov/program_offices/housing/rmra/safe/sfea

HUD Policy

All policy information contained in this knowledge base article is based upon the referenced HUD policy document. Any lending or insuring decisions should adhere to the specific information contained in that underlying policy document.

Topic Number: KA-05321