Mortgage Loan Originators (MLOs) play a pivotal role in one of the most significant financial transactions many consumers make—the mortgage loan. To maintain competence and uphold ethical standards, MLOs must complete Continuing Education (CE) annually. This requirement is federally mandated under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) and regulated by the Nationwide Multistate Licensing System & Registry (NMLS).
Why is Continuing Education Required?
The 2008 financial crisis revealed the consequences of inconsistent mortgage lending standards. The SAFE Act was introduced by Congress to protect consumers and improve accountability in the mortgage industry by enforcing minimum licensing and education requirements for MLOs. Continuing Education ensures MLOs regularly update their knowledge of federal laws, ethical practices, and new lending products.
CE Requirements Overview
To renew their MLO license each year, individuals must complete a minimum of eight hours of NMLS-approved CE. This federally mandated baseline applies nationwide, though some states may require additional hours specific to their local laws.
The typical CE curriculum includes:
- Federal Law and Regulations (3 hours): Updates on important laws such as the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), including the TILA-RESPA Integrated Disclosure (TRID) rule, and consumer protection regulations enforced by the Consumer Financial Protection Bureau (CFPB).
- Ethics (2 hours): Training focused on ethical lending practices, fraud prevention, and consumer rights.
- Non-Traditional Mortgage Products (2 hours): Education on mortgage types outside the conventional 30-year fixed loans, including adjustable-rate mortgages (ARMs) and reverse mortgages.
- Electives (1 hour): Topics like cybersecurity, marketing compliance, or state-specific legislative updates.
MLOs must not repeat the same courses in consecutive years, a requirement known as the “Successive Years Rule,” to encourage continuous learning.
Practical Example
Consider Maria, an MLO licensed in Texas and Florida. She completes her 8-hour CE by taking an NMLS-approved online course covering federal regulation updates, ethics case studies, and non-traditional mortgage insights. Her course provider then reports completion to the NMLS, allowing her to renew her licenses on time.
Avoiding Common Pitfalls
- Don’t wait until the last minute: Completing CE well before the December 31 deadline prevents rushed submissions and technical problems.
- Check state-specific rules: Some states require extra education hours.
- Use only NMLS-approved courses: Courses must be approved to count toward renewal.
FAQ
Q: What if an MLO misses the CE deadline?
Missing CE causes the license to become inactive until late CE requirements are fulfilled.
Q: How is CE different from Pre-Licensing Education?
Pre-Licensing Education (PE) is a one-time 20-hour course required before licensing. CE is the recurring 8-hour annual training.
Q: Do bank-employed MLOs have the same CE requirements?
MLOs working for federally insured institutions are registered, not state-licensed, and receive employer-mandated training aligned with SAFE Act standards.
For more details on mortgage licensing and education requirements, visit the Nationwide Multistate Licensing System & Registry (NMLS) and learn about the SAFE Act from the Consumer Financial Protection Bureau.