Wednesday, December 22, 2010

UPDATE: The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) applies to non-profits and government agencies

UPDATE, December 22, 2010: The Department of Regulatory Agencies has updated its loan originator web site. The best information on state licensing is available at their web site here:

Please follow DORA's recommendations and process for licensing. Please also note the extensive Q and A section at the above link.

Please see this memo which examines the need for mortgage loan originators at non-profits and government agencies to be licensed.

We have removed a previous analysis that did not contain updated provisions requiring the licensing of loan originators at government agencies.


We have received questions from some non-profits regarding the necessity of licensure for employees engaging in loan originations for non-profit organizations. The question pertains to requirements set forth in the “Secure and Fair Enforcement for Mortgage Licensing Act of 2008” (also known as the SAFE Act).

This is an important matter for the Division of Housing since the Division provides grants to non-profits, housing authorities and other agencies for the purposes of making down payment assistance and rehabilitation loans to borrowers.

The SAFE Act covers any individual employed at a non-profit or government agency, and who accepts applications for residential mortgage loans, and who offers or negotiates terms of a residential mortgage loan for compensation or gain. This potentially covers loans made for purposes of down payment assistance or any other loan that is serviced through regular payments and involves a lien against a residence or could otherwise be defined as a mortgage. See the definition of “residential mortgage loan” in the SAFE Act found in 12 USC 5103.

Click here to read full document.