NMLS SAFE Practice Test

NMLS SAFE Uniform State Content & SAFE Act Practice Questions

Uniform State Content & SAFE Act makes up 6 of every 50 questions on a Tigertest NMLS SAFE practice test. Here are 10 of the 24 questions on it, each with the answer and the reason.

Updated 2026-11-10 by the Tigertest team. Based on the NMLS SAFE MLO content outline. Original questions; 50 per test, weighted like the real 120-question test, 75% to pass. Not affiliated with NMLS.

1. 1. Under the SAFE Act, a mortgage loan originator is an individual who, for compensation, takes a residential mortgage application and also:

   • A.Schedules the closing date
   • B.Offers or negotiates loan terms
   • C.Orders the appraisal for the file
   • D.Collects documents for the file

   Answer: B. The SAFE Act defines an MLO as someone who takes a residential mortgage loan application and offers or negotiates terms, for compensation or gain. Clerical support alone does not make someone an MLO.

2. 2. A loan processor works as an independent contractor for several mortgage companies. Under the model state law, the processor must:

   • A.Hold a real estate license
   • B.Be supervised by an appraiser
   • C.Register with the CFPB only
   • D.Hold a state MLO license

   Answer: D. A processor or underwriter who is an employee working under a licensed MLO's direction need not be licensed, but one working as an independent contractor must hold an MLO license.

3. 3. Which person is generally exempt from state MLO licensing under the SAFE Act?

   • A.A bank employee registered in NMLS
   • B.An independent contractor processor
   • C.A mortgage broker's W-2 originator
   • D.A nonbank lender's loan officer

   Answer: A. Employees of depository institutions and their regulated subsidiaries register in NMLS as registered MLOs instead of obtaining a state license. Nonbank originators need a state license.

4. 4. A homeowner sells her own residence and finances part of the price for the buyer. Under the SAFE Act she:

   • A.Must register as a bank MLO
   • B.Must hire a licensed attorney
   • C.Need not be licensed
   • D.Must obtain an MLO license

   Answer: C. An individual who offers or negotiates terms for financing the sale of their own residence is excluded from MLO licensing, as is one who arranges loans for immediate family members.

5. 5. A real estate salesperson helps a buyer find a lender but receives no pay from any lender or mortgage broker. Under the SAFE Act, the salesperson:

   • A.Must register in NMLS as an MLO
   • B.Must split the commission with the lender
   • C.Does not need an MLO license
   • D.Needs an MLO license

   Answer: C. Real estate brokerage activity is outside the MLO definition unless the agent is compensated by a lender, mortgage broker or other MLO.

6. 6. Under the SAFE Act, how many hours of pre-licensing education must an MLO applicant complete?

   • A.20 hours
   • B.12 hours
   • C.24 hours
   • D.8 hours

   Answer: A. The SAFE Act requires at least 20 hours of NMLS-approved pre-licensing education: 3 hours of federal law, 3 hours of ethics (fraud, consumer protection and fair lending), 2 hours on nontraditional mortgage lending and 12 hours of electives.

7. 7. Of an MLO's required pre-licensing education, how many hours must cover nontraditional mortgage lending?

   • A.1 hour
   • B.3 hours
   • C.4 hours
   • D.2 hours

   Answer: D. Within the 20 hours, 2 hours cover nontraditional mortgage products, 3 cover federal law and regulations, and 3 cover ethics, including fraud, consumer protection and fair lending.

8. 8. An applicant was convicted of a felony for check fraud 12 years ago and was never pardoned. Under the SAFE Act, the applicant:

   • A.Can be licensed if the state agrees
   • B.Cannot be licensed as an MLO
   • C.Can be licensed after 7 years
   • D.Can be licensed with a bond

   Answer: B. An applicant may not have a felony conviction in the seven years before applying, or at any time if the felony involved fraud, dishonesty, breach of trust or money laundering. A pardoned conviction does not count.

9. 9. Which background requirement must an MLO license applicant meet under the SAFE Act?

   • A.A personal net worth minimum
   • B.Fingerprints for the FBI
   • C.A clean driving record
   • D.A college degree in finance

   Answer: B. Applicants submit fingerprints to NMLS for an FBI criminal history check and authorize a credit report so the regulator can judge financial responsibility, character and general fitness.

10. 10. A state regulator reviews an MLO applicant's credit report mainly to judge the applicant's:

    • A.Educational background
    • B.Ability to pass company audits
    • C.Loan production history
    • D.Financial responsibility

    Answer: D. The SAFE Act requires the regulator to find that the applicant has shown financial responsibility, character and general fitness. The credit report is the main evidence of financial responsibility.