NMLS-Approved Pre-License – Prospect FAQs

Examples of some prospect questions about our course or school, in general, are below:

Q: What is the NMLS?

A: The Nationwide Mortgage Licensing System & Registry (NMLS) was created to form a central repository of license and disciplinary information on mortgage companies and mortgage loan originators. The SAFE Act requires all state-licensed companies and individual mortgage loan originators working for them to have an account and unique identifier number with NMLS.

Further information about the NMLS is available on their website: https://mortgage.nationwidelicensingsystem.org/

Q: Is Real Estate Institute an NMLS-approved provider?

A: Yes. The Real Estate Institute is an NMLS-Approved Course Provider, #1400102. We offer NMLS-approved Pre-License and continuing education programs. We also provide a SAFE test preparation course to prepare loan originators for the mandatory National exam.

Q: What is the SAFE Act?

A: The Secure and Fair Enforcement in Mortgage Licensing Act was signed into law on June 30, 2008, as part of the Housing and Economic Recovery Act (HERA). The SAFE Act intends to increase uniformity in licensing requirements, reduce regulatory burden, enhance consumer protection, and reduce fraud in the mortgage industry.

Q: To whom does the SAFE act apply?

A: The SAFE Act applies to all companies and mortgage loan originators. However, only those companies that are state-licensed and the individuals originating from them must go through the licensing process.

Q: Who is a “Mortgage loan originator” under the SAFE Act?

A: The SAFE Act, as implemented by rule, defines an "individual loan originator" as an individual who, for compensation or other monetary gains, performs loan origination activities, such as

  • Taking an application.
  • Arranging a credit transaction.
  • Assisting a consumer in applying for credit. A loan originator assists a consumer in obtaining or applying for credit by advising on particular credit terms that may be available to the consumer based on the consumer's financial characteristics.
  • Offering or negotiating credit terms. Credit terms include rates, fees, and other costs. Credit terms are selected based on the consumer's financial characteristics. Those terms are selected based on any factors that may influence a credit decision, such as debts, income, assets, or credit history.
  • Making an extension of credit.
  • Referring a consumer to a loan originator or creditor. Referring is an activity included under each of the activities of offering, arranging, or assisting a consumer in obtaining or applying to obtain an extension of credit.
  • Advertising or communicating to the public that you can or will perform any loan origination services.

The Consumer Financial Protection Bureau (CFPB) has clarified that an individual cannot avoid licensure requirements by having someone else "take" the application. CFPB also explained the limited contexts where offering or negotiating residential mortgage loan terms would not make an individual a mortgage loan originator:

  • Performing only administrative or clerical tasks on behalf of a loan originator or creditor, such as processing or underwriting, provided you perform those services for only one organization at a time.
  • Delivering an application to the consumer for them to fill out and not discussing terms, etc.
  • Providing financing to a buyer pursuant to a sale of your own residence.
  • Performing only real estate brokerage services as a licensed real estate professional as long as you are not being compensated by a lender for offering products or referrals.
  • Providing third-party advisory services, such as an attorney, accountant, financial advisor, or someone assisting an immediate family member, as long as you are not being compensated for the actual loan origination service or for referring clients to a specific creditor or broker.
  • Other assorted situations, such as employees of manufactured home builders in certain cases.

Q: What’s the difference between a Mortgage Loan Originator and Mortgage Broker?

A: A Mortgage Broker is the owner/operator of a business. They are the “financial backing” but cannot work with the borrower unless they also hold a Loan Originator license. A Mortgage Loan Originator is someone who works for a Mortgage Broker and is the primary contact for the borrower. They work one-on-one with the borrower to help them obtain a residential loan.

Real Estate Institute only offers courses to obtain or maintain a Loan Originator license, not a Mortgage Broker license. Contact the local state agency for any inquiries on a Mortgage Broker license.

Q: How do I obtain an NMLS Individual ID?

A: Creating an account in Nationwide Mortgage Licensing System (NMLS) is a requirement, and instructions on how to create an account in NMLS are available on the NMLS website.

Q: Why am I being asked to enter an NMLS ID when enrolling in a Mortgage Pre-License program?

A: NMLS-approved providers must report Pre-License course completions to the NMLS.  To successfully report these completions, we must have your NMLS Individual ID.  You may enter a "0" as a placeholder to enroll at our website, but you must contact us and provide us with the NMLS ID before completing your course.

Here is a link to instructions NMLS created on obtaining an NMLS Individual ID.

Q: After becoming registered with the NMLS, what steps are required to become licensed in an individual state?

A: Each state's mortgage licensing law dictates the requirements for individual state licensure. However, specific requirements exist for all states, and the licensing process will be standardized and facilitated through the NMLS.

Requirements include:

  • Pre-License Education
  • National Examination
  • Background Checks

Please check the NMLS website for updated information about individual state requirements.

Q: In brief, what are the NMLS Pre-License education and testing requirements?

A: Applicants are required to:

  1. Complete at least 20 hours of Pre-License course education (maybe more in some states).
  2. Pass a National standardized examination.

More information about the education requirements in each state is available on the NMLS website.

Q: Exactly what Pre-License education is required by the SAFE Act?

A: The SAFE Act requires that the 20 hours of Pre-License education shall include:

  • 3 hours of Federal law and regulations
  • 3 hours of ethics, which shall include instruction on fraud, consumer protection, and fair lending issues
  • 2 hours of training on lending standards for the nontraditional mortgage product marketplace. HUD has acknowledged that "nontraditional mortgage product" means any mortgage product other than a 30 year fixed rate mortgage
  • 12 hours of other instruction on mortgage origination

Some states may have state-specific requirements. See the NMLS State-Specific Education Requirements Chart for details.

Q: Do your 20-hour programs satisfy all my Pre-License education requirements?

A: Our courses satisfy the base requirement for 20 hours of Pre-License education in the federal SAFE Act. It covers the minimum requirements for federal law, ethics, non-traditional mortgage lending, and elective education.

Some states have state-specific requirements for Pre-License education beyond the 20-hours required under federal law. You can find a list of states with a state-specific education requirement by viewing the State-Specific Education Requirements Chart on the NMLS website.

We do not currently offer state-specific Pre-License education. Information about NMLS licensing procedures for a specific state can be found on the NMLS website.

Q: Will your 20-hour Pre-License course help prepare me for the mandatory SAFE examination?

A: Our Pre-License courses cover most of the topics listed on the NMLS test content outline for the National Component exam.

However, keep in mind that Pre-License education is intended to provide originators with a knowledge base to work in the mortgage industry. The NMLS does not approve pure "test preparation" courses for Pre-License education. After completing their Pre-License education, we recommend that our students study for the SAFE exam using our PREP-to-PASS program.

Q: How can I complete my 20-hour requirement with Real Estate Institute?

A: We offer all three NMLS-approved delivery options, which are classroom courses, classroom equivalent courses (such as live webinars), or online instructor-led courses (a comprehensive, interactive online course like those offered at online universities).

Options on our course offerings can be reviewed in our NMLS-Approved Pre-License Options & Information article.

Q: Is self-study permitted for Pre-License courses?

A: No. NMLS-approved Pre-License courses must be offered as classroom courses, classroom equivalent courses (such as live webinars), or online instructor-led courses (a comprehensive, interactive online course like those offered at online universities).

Q: How long will it take to complete the online instructor-led course?

A: NMLS courses are based on a 50-minute hour, meaning that each hour of credit consists of a 50-minute block of time. The course should take the average student 20 hours to complete (based on the 50-minute hour). Actual time spent in the course may be longer, depending upon the speed at which a student reads, the length of exercise responses, instructor feedback, etc.

Real Estate Institute's online instructor-led course is six days, and students will need to complete one module of instruction each day for five days (Monday through Friday), with the final exam being taken on the sixth day (Saturday).

Q: Can I take my course using a mobile device?

A: No. Students must participate using a desktop or laptop computer as the NMLS does not currently approve courses for use on mobile devices. Please review the Technical Requirements article for further details on our Live Webinar and Online Instructor-Led requirements.

Q: Does Pre-License education expire?

A: Yes. See the Pre-License Expiration Policy article for further details.

Q: Can I have a real estate license and loan originator license?

A: Yes. A licensee can be licensed as a licensed real estate agent and loan originator. However, the licensee cannot represent the same client on the same transaction.

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