Uniform State Content (SAFE EXAM)

Loan Processor

Gather, organize, and review the loan application and supporting documents to ensure they are complete and comply with lender and regulatory requirements before submission to the underwriter.

Loan Processors do not…

make approval decisions or offer advice on loan programs

MLOs

Assists borrowers in applying for a mortgage, advises on loan products, and negotiates terms with the lender.

Loan Processors interaction with customers?

Limited; typically only requests documents or clarifies missing information.

MLO interaction with customers?

Direct; discusses loan options, answers questions, and guides borrowers through the application process.

Loan Processor decision making authority

No decision-making authority on loan terms or approval.

MLO decision making authority

Plays a key role in setting loan terms and submitting the application for approval.

Licensing Requirements for Loan Processor

No license required, unless they perform tasks requiring MLO duties (e.g., advising borrowers on loan products).

Licensing requirements for MLO

Must be licensed under the NMLS (National Mortgage Licensing System) and meet federal and state requirements.

Loan Processor Regulatory boundaries

Cannot offer loan advice, negotiate terms, or take loan applications.

MLO regulatory boundaries

Licensed to originate loans, take applications, and provide advice to borrowers on available mortgage products.

Lock-In Agreement

A written contract between a borrower and a lender to lock the interest rate and other loan terms for a specified time period before closing.

Rate Lock Period

The duration of the lock period, which is the agreed-upon time frame (e.g., 15, 30, or 60 days) in which the loan's interest rate and terms will be fixed.

Lock-In Fee

Some lenders charge a fee to secure the lock-in agreement. This fee can be non-refundable or used to cover part of the closing costs if the loan closes.

Renewal or Extension

If the loan does not close within the original lock-in period, the borrower may be able to extend or renew the lock, possibly for an additional fee.

Lock-In Expiration

If the loan does not close before the lock-in agreement expires, the borrower may be subject to the current market rate, which could be higher or lower than the locked rate.

Float Down Option

Allows the borrower to secure a rate lock and then "float down" (lower the rate) if interest rates decrease before the lock period expires. This option often comes with a fee.

Full Lock-In

Locks the interest rate, points, and other fees for the duration of the loan process. Ensures that nothing about the loan terms changes, even if market conditions change.

A licensee’s contact information changed recently, and her office address in the NMLS files is now incorrect. What is the licensee legally obligated to do in this situation?

She must amend or correct the information on file with the NMLS.

Because of your duties as a licensee, what are you required to ensure regarding all client funds entrusted to you?

All funds are accounted for correctly.