How To Choose Your NMLS-Approved, 20-Hour Pre-Licensing Course

As a seasoned mortgage trainer, I am regularly approached by prospective mortgage loan originators (MLOs), flustered over the confusing process of pursuing and procuring their license to originate residential mortgage loans. Of the multitude of questions that they typically ask, one of the most frequent questions that I field is how they can find the best NMLS-approved, 20-hour pre-licensing course to take.

Unless an individual works for a depository institution regulated by a federal banking regulator or the Farm Credit Administration (FCA), to originate federally-related mortgage loans secured by properties located throughout the United States and its possessions, mortgage loan originators must be licensed by each state and possession in which that individual desires to conduct business. Prerequisites to applying for one’s MLO license include the successful completion of an NMLS-approved, 20-hour pre-licensing course, state-specific education required by the state or possession through which they desire licensure, and passing the 120-question, NMLS National MLO Licensing Examination.

The NMLS-approved, 20-hour course is the primary means for preparing test candidates for the NMLS exam. Due to the significant amount of material that has to be delivered in a 20-hour curriculum, however, no 20-hour course can, in and of itself, thoroughly prepare anyone for this exam. This is painfully apparent by the exam’s overall 48% failure rate. It is critical, therefore, that test candidates choose a 20-hour course that not only best prepares them for the exam, but effectively positions them for the mandatory self-study once they have finished their course.

In order to offer a 20-hour pre-licensing course, the course provider, as well as the course itself, must be NMLS-approved. As a 20-hour course instructor who has been instructing these courses for over 12 years, I can wholeheartedly affirm to you that, even though their courses are technically approved by the NMLS, not every course provider is offering quality coursework in a quality manner. Unfortunately, many of the course providers care little about whether their students pass the NMLS exam, as long as they’re paid their tuition.

Choosing the right NMLS 20-hour course provider and course can be instrumental to a future MLO’s success. And finding the right 20-hour course entails much more than simply registering for the course recommended by one’s employer.

Although there are numerous NMLS-approved education providers, the list for which may be found here, it’s critical to remember that not every course provider and not every course is going to prepare you for success. When choosing a course provider, serious test candidates should consider the following six factors and course recommendation:

• Provider Seasoning and Instructor Credentials
• Course Modality, Frequency, and Currency
• Access to Study Materials
• Supplemental Materials
• The NMLS Test Content Outline
• The Reviews
• Course Recommendation

Provider Seasoning and Instructor Credentials

A course provider who has recently secured NMLS approval is not likely to have worked out the bugs surrounding their recently-implemented processes. Furthermore, classes run by incompetent or unseasoned instructors can prove detrimental to their students’ success.

Questions to ask the prospective course provider are:

• How long has the company been offering these courses? If it is less than two years, you might want to keep looking.
• Do the instructors have actual instructional experience or are they simply school administrators or mortgage professionals with little previous experience instructing licensing courses? If the answer is the latter, you also might want to keep looking. Remember, just because someone may have worked in an industry for a significant period of time does not make him or her an effective educator.
• Is there any opportunity for significant student-instructor interaction? If not, move on!
• Has the instructor actually taken the NMLS exam? You would be surprised how many NMLS 20-hour course instructors have not. You absolutely want your instructor to understand, first-handedly, what you are going to experience.

Course Modality, Frequency, and Currency

NMLS 20-hour courses may be conducted through live classroom, webinar, and online/instructor led modalities. Ideally, the best setting through which to complete this course is the live classroom. Since the demand for live classroom sessions, however, is minimal, course providers are usually reluctant to conduct live classroom trainings due to their cost-ineffectiveness. Webinars are the next best option, but they often prove cumbersome for the busy professional because of their structured dates and times. Online/instructor led courses are the most common because they are the most cost-effective to execute. The pro of this modality is that the student can progress through the course at his or her own pace on his or her own schedule. The cons are that there is less instructor interaction and it can be challenging to concentrate when distractions abound. Although it may still be possible to find the course executed through a live classroom or webinar modality, the prospective student should conduct his or her due diligence when researching which course to take.

Another consideration to explore is the frequency at which the course provider offers the course. If the course provider is only conducting the course periodically, how can you be certain that you are learning from someone who is familiar with the material? After all, repetition brings proficiency.

Lastly, the NMLS exam tests the licensing candidate’s knowledge of current rules and parameters that are applicable as of the date of their test. It is important to ensure that the instructors are thoroughly familiar with, and their courses are representative of, current industry parameters. Since the NMLS only requires courses to be updated and re-certified annually, quality course providers diligently update their courses as industry developments occur.

Questions to ask the prospective course provider are:

• How frequently is the course offered? If it is executed infrequently, the instructor may be rusty and unfamiliar with current industry developments.
• How frequently is the course updated to align with current industry trends and developments? If it is only updated annually, it just might not be the course for you.

Access to Study Materials

One of the most frustrating situations that I encounter as an NMLS exam preparer is students turning to me for tutoring and they have nothing from which to study. Many 20-hour course providers simply do not provide their students with materials to keep and afford them access to the study resources only during their course. Once they complete their course, they are on their own.
Question to ask the prospective course provider:

With what materials do they provide their students from which the student can study after the course’s conclusion? If the answer is nothing, run!

Supplemental Materials

Quality course providers understand the importance of added value and do not limit their 20-hour course to the presentation of a simple PowerPoint. Quality course providers distribute supplemental study material reviewing many of the specific topics covered on the NMLS Test Content Outline. Quality course providers provide the PDF to a textbook, practice exams, test-taking strategy resources, flashcards, and other materials helpful to the student during their post-course studies. These supplemental items should also be included in the course’s tuition and not sold separately.

Questions to ask the prospective course provider:

• What supplemental materials do you provide to your students?
• Are practice exams included as a part of the course?
• Is there a separate charge for any supplemental materials offered? If there is, you might want to look elsewhere.

The NMLS Test Content Outline

The NMLS Test Content Outline is the document that is not only used by the 20-hour course providers to create their 20-hour courses, but also used by the NMLS to create the NMLS exam. It is a publicly-available document that can be found on the NMLS’ website, but it is tucked away and not easily found.

Quality 20-hour course providers know the importance of distributing this outline to their test candidate students and teaching them how to properly use it. It is astonishing how many course providers are unfamiliar with and do not distribute this important document.

Question to ask the prospective course provider:

• Do you distribute the NMLS Test Content Outline? If not, this is not the right provider for you!

The Reviews

Do not simply take the course provider’s word regarding the number of satisfied students they’ve instructed. How do you know that they are being honest and forthright? Be sure to ask around. Read reviews. Seek out others’ opinions. Do your due diligence. And be thorough. Just because a course provider may be popular does not mean that they are good. Additionally, course providers have no means for tracking their students’ success rates so never trust any course provider who boasts a high success rate. They simply have no way of substantiating that claim because former students are not compelled to report their test results to their course providers.

Due diligence to perform regarding your prospective course provider:

• Research and read customer reviews.
• See if the provider is registered through a local Better Business Bureau (BBB) and read their reviews if they are.
• Check with the NMLS to determine if there have been any complaints lodged against this course provider.
• Be wary of any course provider who boasts about a high success rate.

Course Recommendation

In the over twelve years that I have been instructing the NMLS 20-hour pre-licensing course, I have encountered many 20-hour course providers – some exceptional and some, well, let’s just say less-than-exceptional. If I were asked to recommend one over all of them, I would, without hesitation, recommend OnlineEd.

OnlineEd offers an NMLS-approved, online, self-paced 20-hour course (along with numerous NMLS-approved, state-specific pre-licensing courses) in an easy-to-follow and easy-to-access online modality. What makes OnlineEd stand out from their competition is because, not only are they more competitively priced, but they also genuinely care about their students’ success. Are they interested in generating revenue? Of course! They would not be in business if they weren’t. But they also have the foresight to understand that it is not just about tuition generation. Revenue is guaranteed as long as they take care of their students. And that is OnlineEd’s priority and what OnlineEd does.

OnlineEd’s NMLS-approved, 20-hour, online pre-licensing course offers:

• A seasoned mortgage instructor;
• An exceptional course curriculum to be completed over a 14-day period;
• Online materials including a 472-page ePUB textbook that the student can keep;
• Supplemental instructional videos that the student may watch at their leisure;
• Online audio;
• An optional weekly Q&A webinar with a live instructor;
• Practice tests;
• A test simulator;
• Online flashcards;
• A live test prep strategy webinar; and
• A printable completion certificate

Additionally, OnlineEd stays abreast of industry changes and developments and updates their courses accordingly. New courses begin every day.

Test candidates desiring to register for any of OnlineEd’s pre-licensing national or state curriculums may register here.

Whether you ultimately pursue your 20-hour course prerequisite through OnlineEd or a different provider, now that you know what to look for, you are one step closer to success as a licensed mortgage loan originator.