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Licensed Mortgage Loan Originator

Frequently Asked Questions
What is the SAFE Act and NMLS?
Following the economic crises of 2008, the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) was established to increase uniformity, reduce regulatory burden, enhance consumer protection, and reduce fraud. To reach this end a Nationwide Mortgage Licensing System and Registry (NMLS) was established to provide uniform license applications and reporting, comprehensive supervision, work flow among regulators, enhanced consumer protection, consumer access to information, and other measures designed to reduce fraud and protect the consumer. This will impact all licensed mortgage officers and affect in some degree how they maintain their licenses.
Who must license?
According to Utah law, and now Federal law, any individual, company, company branch, or DBA (whether physically located in Utah or not) that transacts the “business of residential mortgage loans” in Utah must register and/or obtain a license from the Division. For a simple chart showing what you must do and when see: Safe: 2009 and 2010 Changes.

"Business of residential mortgage loans" is defined in statute as: 1) originating a residential mortgage loan; 2) directly or indirectly soliciting, placing, or negotiating a residential mortgage loan; or 3) rendering services related to the origination or funding of a residential mortgage loan, including taking applications, obtaining verifications and appraisals, and communicating with the borrower and lender. (Utah Code §61-2c-102)

Who is exempt from licensing?
A license is not required for the following individuals who give an opinion regarding the value of real estate (but an opinion of value may not be referred to as an "appraisal"):
  • A licensed real estate Broker or Sales Agent who gives an opinion of value in the ordinary course of business.
  • An employee of a company who gives an opinion of value solely for the company’s use.
  • Any government official or employee acting within their scope of duties.
  • An auditor or accountant who gives an opinion of value while performing an audit.
  • An individual who gives an opinion of value for property in which the individual has an ownership interest.
  • An individual who gives an opinion of value for which no consideration is paid and upon which no other party is reasonably expected to rely.
  • An individual, such as a researcher or secretary, who does not provide significant professional assistance at arriving at analysis, opinion, or conclusion.
  • An attorney authorized to practice law in Utah who uses an appraisal report or who states an opinion of value in the ordinary course of business.

How do I become a licensed Mortgage Loan Originator?

You must create a record on the NMLS website to request licensure.  No paper applications can be accepted at the Division office. The mortgage licensing laws and regulations have changed to comply with the federally mandated SAFE Act. The Utah Division of Real Estate is in the process of transitioning to the Nationwide Mortgage Licensing System (NMLS).  It is important that you closely follow these instructions to obtain a loan originator's license in Utah:

  1. Meet the statutory licensing qualifications of good moral character, competency, honesty, integrity, and truthfulness. (Utah Code Annotated §61-2c-203)
  2. Meet the statutory minimum licensing qualifications as outlined in Title V Sec 1505 of the Safe Act, that include the following:
    1. The applicant has never had a loan originator license revoked in any governmental jurisdiction.
    2. The applicant has not been convicted of, or pled guilty or nolo contendere to, a felony in a domestic, foreign, or military court--
      1. During the 7-year period preceding the date of the application for licensing and registration; or
      2. At any time preceding such date of application, if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering.
    3. The applicant has demonstrated financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that the loan originator will operate honestly, fairly, and efficiently within the purposes of this title.
  3. Be at least 18 years of age at the time of application.
  4. Create your personal record in NMLS and complete Form MU4 (Individual Record).  The company you are affiliating with must also create an account in NMLS in order to sponsor a new loan originator.  Please reference NMLS Quick Guides. 
  5. You must take and pass the NMLS national exam and the Utah state exam.  After you have registered on NMLS, you will obtain a "unique identifier number" that will allow you to register to take the NMLS national portion of the exam.  New applicants will continue to take the state portion of the exam through a Utah testing center until such time as the NMLS state test is completed on February 22, 2010.  Note:  These tests may be administered at two different locations. You must pass both exams to become licensed.
  6. Take the education requirements that include 20 hours of NMLS-approved courses (3 hours federal law and regulations, 3 hours ethics (including fraud, consumer protection, and fair lending practies), 2 hours non-traditional mortgages, and 12 hours of electives); AND 40 hours of Utah-approved pre-licensing education through an approved provider.  The Utah 40-hour education must be completed prior to taking the state exam.
  7. Pay all licensing fees as assessed in NMLS.
  8. Complete Social Security Verification Form and submit to the DRE.