Finance
The SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act) requires:
AAll real estate agents to register as mortgage loan originators
BResidential mortgage loan originators to be licensed or registered through the NMLS✓ Correct
CBanks to provide safe deposit boxes at all branches
DAll mortgage companies to be federally chartered
Explanation
The SAFE Act requires all residential mortgage loan originators (MLOs) to be licensed through the Nationwide Multistate Licensing System & Registry (NMLS), pass testing, complete pre-license education, and undergo background checks.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Discount PointsPrepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
State-Specific Concepts
Pre-License Education
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