What is the main purpose of the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act)?

The main purpose of the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act) is to enhance consumer protection and reduce fraud within the mortgage industry. This act aims to establish a standardized system for the licensing and registration of mortgage loan originators across the United States. By requiring MLOs to undergo background checks, demonstrate competency through testing, and adhere to ethical standards, the SAFE Act increases accountability among mortgage professionals. This ultimately protects consumers by ensuring that they are dealing with qualified individuals who are less likely to engage in predatory lending practices or acts of fraud.

While other options may touch upon aspects of the mortgage process, they do not encompass the primary focus of the SAFE Act. For instance, increasing loan amounts, simplifying mortgage applications, or promoting housing market growth are not central to the objectives of the SAFE Act. These provisions could potentially be impacted by the standards set forth in the SAFE Act, but they do not define its core mission of fostering a safer, more transparent environment for borrowers.