The SAFE Act requires what specific educational requirement for state-licensed loan originators?

The SAFE Act, which stands for the Secure and Fair Enforcement for Mortgage Licensing Act, establishes a framework for the licensing and registration of mortgage loan originators. One of the key requirements outlined in the SAFE Act is that state-licensed loan originators must complete at least 20 hours of prelicensing education. This educational component is designed to ensure that loan originators understand the mortgage process, the laws and regulations governing their industry, and other essential aspects that affect their work and the consumers they serve.

These 20 hours of prelicensing education cover important topics such as federal and state mortgage laws, ethics, and lending standards, all of which are vital for accurate and compliant mortgage origination practices. This requirement helps to enhance the professionalism and competence of loan originators, ultimately benefiting consumers by promoting informed lending practices.

In contrast, the other choices do not pertain directly to the specified educational requirements set forth by the SAFE Act. Disclosure of PMI cancellation timing, mandated disclosures at loan closing, and ordering appraisals through an appraisal management company are important operational and compliance tasks related to mortgage lending but do not directly address the educational qualifications required for state-licensed loan originators as highlighted by the SAFE Act.