How to Become a Mortgage Loan Originator: Step by Step
Anyone who takes a residential mortgage application and offers or negotiates loan terms for pay is a mortgage loan originator under the SAFE Act (12 U.S.C. 5102(4)). If you will work for a non-bank lender or broker, you need a state license; if you work for a bank or credit union, you are registered instead. This guide covers the state-licensed path.
The steps
| Step | What you do | Rule |
|---|---|---|
| 1. NMLS account | Create an individual account and get your permanent NMLS ID | 12 U.S.C. 5102(12) |
| 2. Pre-licensing education | 20 hours of NMLS-approved PE, plus any state-specific hours | 12 U.S.C. 5104(c) |
| 3. SAFE MLO Test | Pass the National Test with UST with 75% or more | 12 U.S.C. 5104(d) |
| 4. Background | Fingerprints for an FBI check and a credit report authorization through NMLS | 12 U.S.C. 5104(a) |
| 5. State application | Submit the license application (Form MU4) for each state and pay fees | State law |
| 6. Sponsorship | Your licensed employer sponsors your license in NMLS | Model State Law |
| 7. Renewal | Complete 8 hours of CE each year and renew by year-end | 12 U.S.C. 5105 |
Who cannot be licensed
- Anyone whose MLO license was revoked anywhere (unless the revocation was later vacated).
- Anyone convicted of a felony in the 7 years before applying.
- Anyone ever convicted of a felony involving fraud, dishonesty, breach of trust or money laundering.
- Anyone who cannot show financial responsibility, character and general fitness (12 CFR 1008.105).
Practice is not PE
Moving from a bank
Registered loan originators moving to a state-licensed company can often keep working while their application is pending under temporary authority (12 U.S.C. 5117, since November 24, 2019), if they meet the conditions. See the SAFE Act study note.
Frequently asked questions
How long does it take to become an MLO?
Typically a few weeks to a few months: 20 hours of PE, study for and pass the test, background checks and state processing.
Do bank loan officers need a state license?
No. Employees of banks and credit unions are registered in NMLS instead (12 U.S.C. 5103).
Can I be licensed with a criminal record?
A felony in the 7 years before applying, or any fraud-type felony, is a bar; other history is judged for character and fitness (12 CFR 1008.105).
Go deeper: study notes
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