Federal Mortgage Law and Regulation: NMLS Federal Resource Center
Federal mortgage law and regulation (NMLS Federal Resource Center)
The federal portion tests the laws and regulations in the NMLS Federal Resource Center: SAFE Act licensing, TILA/Regulation Z and TRID, RESPA/Regulation X, ECOA/Regulation B, HMDA/Regulation C, Fair Housing Act, FCRA, GLBA privacy, BSA/AML, and UDAAP. The exam asks how these requirements appear in origination files and MLO conduct.
Core rules
- SAFE Act: MLOs must be licensed or registered, meet prelicensing and continuing education, pass the SAFE test, submit fingerprints, and be sponsored. Federal law sets minimum standards; states may add requirements.
- TILA/Reg Z: provide a Loan Estimate within three business days after application and a Closing Disclosure at least three business days before consummation. Revised Loan Estimate timing rules apply when fees or terms change.
- RESPA: no fee, kickback, or thing of value for referrals of settlement service business; affiliated business arrangements require disclosure and cannot require use of the affiliate.
- ECOA: adverse action notices generally within 30 days of a completed application; fair lending prohibits discrimination.
- HMDA: collect and report covered application data; BSA/AML: monitor and report suspicious activity; GLBA: safeguard nonpublic personal information.
Worked example
A borrower submits a complete application on Monday. The Loan Estimate must be delivered or placed in the mail no later than Thursday, counting Tuesday as business day one, Wednesday as two, and Thursday as three. If the borrower only asks a question and provides no six-piece application information, the Loan Estimate clock has not started.
Traps
Calling NMLS the regulator; missing the difference between an application and a prequalification; confusing Loan Estimate and Closing Disclosure timing; and assuming a state license excuses a RESPA kickback.