SAFE Act - What are the major highlights?

Earlier, it was quite easy to become a mortgage officer. However with the introduction of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act), things are changing. The SAFE Act will help in increasing consumer protection and reducing fraud. The last date for the states to have the licensing and registration system in place was July 31, 2010.

Here are some of the major highlights of SAFE Act:

• Registration and minimum standards: There would be registration of mortgage-loan originators and minimum standards for state licensing which would include education requirements, criminal background checks, etc. for those who originate mortgages.

• National registry of mortgage-loan originators: The consumers will get access to a national registry of mortgage-loan originators. Borrowers will be able to check out the employment history as well as view disciplinary and enforcement actions against lenders with whom they are planning to do business.

• Reduce regulatory burden: This act is aimed at streamlining the licensing process and will also help in reducing the regulatory burden.

• Consumer protection: The main aim of this act is to enhance consumer protection. This act also supports anti-fraud measures.

• Consumer complaints: This act also aims at collection as well as disbursement of consumer complaints on behalf of state mortgage regulators.

• Amendment to the Truth in Lending Act (TILA): An amendment to the TILA now requires creditors to give good-faith estimates within 3 business days once they receive the consumer's mortgage application. Once this is done, the creditors must wait for 7 business days before closing the loan.

Concerns regarding the SAFE Act:
It will take months to hire, educate and license loan officers. Thus, when demand for mortgages increase, people won't be able to get the home loans quickly.