May a state issue “provisional licenses” to mortgage loan originators who have not completed the SAFE Acts testing and education, or prior to a states completion of the required background check?
A state may issue a SAFE-compliant loan originator license only upon evidence sufficient to support findings by the state agency that each of the minimum licensing standards has been met. Nothing in the SAFE Act prohibits a state from seeking additional evidence after it issues a license or from reconsidering the accuracy of a prior finding upon considering additional evidence that becomes available to the state. Please also see section D of HUD’s Commentary on the Model State Law (“HUD’s Commentary,” also available on the SAFE Act page of this website) for guidance on dates by which states must require individuals to obtain SAFE-compliant licenses. May a state’s SAFE legislation contain a grandfathering provision allowing mortgage brokers and others who have been engaged in the business of originating loans for an extended period of time to meet the SAFE Act’s testing and education requirements by some alternative means? No. The SAFE Act does not allow alternative methods for meeting
