Loan Officer Practice Exam 2026 – Comprehensive All-in-One Guide for Exam Success!

The correct answer highlights that qualified state-licensed mortgage loan originators (MLOs) seeking licensure in another state can originate loans under temporary authority while they complete their licensure requirements. This is consistent with the guidelines established by the Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), which allows these individuals to operate in a new state without having to wait for full licensure, thereby facilitating the process of acquiring new licenses in different jurisdictions.

The law recognizes the qualifications and competencies that these state-licensed professionals already possess, hence allowing them to continue their work in a new state as they meet the local regulations. This provision aims to streamline the transition for licensed MLOs, ensuring that they can maintain their livelihood while navigating the licensure process.

In the context of the other options, those who are changing company sponsorship typically do not require temporary authority since they maintain their existing licenses. Non-licensed individuals with loan experience are not permitted to originate loans until they have obtained the proper licensing. Lastly, all loan officers regardless of licensure status would not be included under the temporary authority provisions, as that would undermine the regulatory framework designed to ensure that only qualified individuals perform these roles.