The Secure and Fair Enforcement Act, also referred to as the SAFE Act passed into law in 2008 in response to the subprime mortgage crisis. The SAFE Act was designed to both protect consumers and encourage states to develop minimum standards for mortgage loan originators. As a result of the SAFE Act, the Nationwide Multi-State Licensing System and Registry (NMLS) was born.

The SAFE Act requires all residential MLOs to be either federally registered or state-licensed. And, a mortgage loan originator who has employment through a federally-insured depository institution, credit union, or a federally-supervised subsidiary must be registered on the national level through the NMLS.

This helps prevent bad actors from the industry from approving questionable or fraudulent loans and staying undetected by applying to multiple states.

The NMLS is a centralized, federal data repository that holds information related to loan officers, finance companies, and mortgage companies. In order to become a mortgage loan originator, you’ll need to get an NMLS license.

Your NMLS license gives you a unique identifying number that allows state and federal regulators to track and supervise mortgage and mortgage-related data. To update or change your mortgage education status, you’ll need to go through this centralized NMLS system.