The US Department of Housing and Urban Development published a proposed rule which would set the minimum standards that states must meet to comply with the Secure and Fair Enforcement Mortgage Licensing Act of 2008 (SAFE Act) in licensing both forward and reverse mortgage loan originators.
“By introducing nationwide standards of uniform licensing for loan originators, the SAFE Act is taking an important step in returning integrity and accountability to the residential mortgage loan market,” said FHA Commissioner David Stevens. “Implementation of this Act is a critical addition to our system of regulatory protections that will benefit both consumers and financial institutions.”
The SAFE Act was enacted into law on July 30, 2008, as part of the Housing and Economic Recovery Act of 2008 and is designed to enhance consumer protection and reduce fraud by encouraging states to establish minimum standards for the licensing and registration of state-licensed mortgage loan originators.
While states are charged with enacting licensing standards that meet the requirements of the SAFE Act, overall responsibility for interpretation, implementation, and compliance rests with HUD said a statement.
If HUD determines that a state’s licensing standards do not meet the minimum requirements of the Act, it is required to implement and administer a licensing system for that state.
See the proposed rule here.