Ethics · 18% of the SAFE exammedium
Correct answer: The MLO's license lapses and they cannot originate loans until CE is completed and the license is reinstated
Under the SAFE Act, a state-licensed MLO who fails to complete the required annual continuing education loses their license at renewal. A lapsed MLO may not originate mortgage loans until the CE requirement is satisfied and the license is formally reinstated by the relevant state licensing authority. "The MLO may continue originating loans during a 60-d..." is incorrect — the SAFE Act does not establish a 60-day grace period for failed CE; while transitional licensing provisions exist in some states for MLOs changing employers, these do not apply to CE failures. "The MLO must pay a $500 penalty but can continue wor..." is incorrect — no SAFE Act provision permits continued origination upon payment of a penalty alone. "s license lapses and they cannot originate loans unt..." is incorrect — liability does not automatically shift to the supervising lender, and supervision does not cure the unlicensed origination issue.
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