safelogoThe Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act”), was passed on July 30, 2008.  As you will note from the updated graphic below, most states have already come on board.  California is the latest (but this is not yet indicated on the map).  According to ProSchools, an industry training source, the Conference of State Bank Supervisors has estimated as many as 45,000 loan originators in CA will need to take the SAFE Act National Test but admits some of those may simply drop out of the business. New Jersey is another recent addition with estimates of 22,000 loan originators.

State regulators continue to warn loan originators not to wait to take the National and/or State components of the examination.  Approved schools offering the required 20-hour course are also warning their students that the test is very difficult. For even the most experienced reverse mortgage originators without any forward lending experience, the test is really difficult.

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If loan orignators wait until the very last minute to take this test and fail, they must wait 30 days before a retake is allowed.  If the deadline is December 31st and you wait until the last minute… and fail, you will be out of business until you retake and pass the SAFE Act Test.  During that period you will not be able to take a loan application.  Given the high initial failure rate, it is just too risky to wait. Do it now!

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Author – Robert H. Irving, CSA®
Senior Reverse Mortgage Consultant