Mortgage Loan Originator Licensing Quiz

License Sponsorship

• Licensed mortgage loan originators (MLOs) require sponsorship by a company holding a state license.
• Company sponsorship initiates with a company relationship.
• Sponsorships are created when a company requests sponsorship for an individual MLO.
• Sponsorships are approved by licensing authorities, requiring employer supervision of the MLO's activities.
• One company can sponsor multiple MLO licenses.
• Sponsorships can be terminated by either the company or the individual.
• MLOs must have a sponsor for "approved" license status.

Individual Licensing Qualifications

• Each state has licensing requirements for MLOs.
• Applicants must undergo criminal background checks (FBI conducted) through NMLS.
• Fingerprint submissions are due within 180 days of background check payment.
• Applicants must provide personal history, employment, and education details.
• Applicants must complete 20 hours of pre-licensing education including federal law & regulations, ethics, nontraditional mortgage products, and electives.
• Approved courses report credits to NMLS within 7 calendar days.
• A 75% score on the National Test (UST) is required.
• The UST covers federal mortgage laws, general mortgage knowledge, mortgage loan origination, and ethics.
• Applicants have 180 minutes to complete the exam.
• Applicants can take the exam a maximum of three times with 30-day breaks between failures.
• A 6-month waiting period follows the third failed attempt.
• Applicants must demonstrate financial responsibility (e.g., coverage/bond or recovery fund contributions).
• Credit reports are required to verify no outstanding judgments, tax liens, foreclosures within the past 3 years, or a pattern of delinquent accounts.
• Applicants must provide explanations for administrative, civil, or criminal issues.
• No previous MLO license revocations or felony convictions (within seven years of application or ever if related to financial services).

Temporary Licensing to Originate

• The SAFE Act added Temporary Authority to Operate to streamline processes for MLOs changing jobs or seeking additional licenses.
• Federally-registered MLOs changing employers can continue operations during license application process.
• State-licensed MLOs can operate in new or additional jurisdictions while license applications are pending.
• Temporary Authority is granted automatically during license application submission on NMLS.
• Applications that appear incomplete on NMLS end the temporary authority after 120 days.
• Temporary authority ends when the state approves, denies, or issues a notice of intent to deny the application.
• To be eligible for temporary authority, an MLO must meet specific employment, registration, and licensing requirements (within one year and 30 days of the application).
• Past license denials, revocations, or suspensions, cease-and-desist orders, or crimes preventing licensing are ineligible.

License Denial

• State licensing authorities deny licenses based on SAFE Act violations.
• Pending criminal investigations, convictions related to financial crimes, or failure to demonstrate trustworthy financial practices are grounds for denial.

Test your knowledge on the licensing requirements for mortgage loan originators (MLOs) and their sponsorship processes. This quiz covers individual qualifications, background checks, and the importance of company sponsorship in various states.