Frequently Asked Questions (FAQs)
Answers to your questions
North Carolina is the only state that requires the MLO licensing candidate to have a credit score of 620 or higher. All other states will review and consider the quality and content of the candidate’s credit profile without considering their credit score.
Mortgage loan originator licensing candidates must be able to demonstrate financial responsibility, character, and general fitness such as to command the confidence of the community and to warrant a determination that he or she will operate honestly, fairly, and efficiently. A person has shown that he or she is not financially responsible when he or she has shown a disregard in the management of his or her own financial condition. A determination of financial irresponsibility may include, but is not limited to currently-outstanding judgments (except judgments resulting solely from medical expenses), currently-outstanding tax liens or other government liens and filings, foreclosures within the past three years, and a pattern of seriously-delinquent accounts within the past three years. All mortgage loan originator licensing candidates with derogatory credit issues should be prepared to submit a written statement, along with their license application, explaining what happened, how they have or are resolving the issues, and what they are doing to prevent the issues from recurring.
Yes. But be cautious. There is a lot of outdated and inaccurate material on the Internet. Be sure to thoroughly vet the source and make certain that whatever you’re studying is current.
If a test taker passes the NMLS test and then neglects to secure at least one state license within the five-year period from when he or she passed it, he or she will have to re-take and once again pass the NMLS exam.
No. Although the test administrators do not inform test takers of the test questions that they incorrectly answered, each test taker is provided with a breakdown advising them of their performance throughout the five content areas (above average, average, and below-average). They may use this as a guide in preparing for their next NMLS exam attempt.
Test takers learn their test results immediately upon completion of the NMLS exam.
Yes. If you fail the exam (but hopefully you won’t), you may retake it after paying for it again and waiting 30 days from the date that you originally took it. If a test candidate fails the NMLS exam a second time, he or she may take it a third time after paying for it again and waiting another 30 days. If the test candidate fails it a third time, he or she may take it a fourth time, but this time, in addition to paying for the exam again, he or she must wait six months. And then the process repeats.
Scheduled test candidates who desire to cancel or reschedule their exam will want to visit: https://nmlsportal.csbs.org/csm?id=kb_article_view&sysparm_article=KB0016877&sys_kb_id=cae33b141bd17c50761263dbe54bcb07
Individuals in need of special testing accommodations should visit: https://nmlsportal.csbs.org/csm?id=kb_article_view&sysparm_article=KB0016733&sys_kb_id=bdd194681b2834503198dc6ce54bcb7b
The NMLS exam is broken down into five content areas: 1.) Federal Mortgage Related Laws (24%), 2.) The Uniform State Content (11%), 3.) General Mortgage Knowledge (20%), 4.) Mortgage Loan Origination Activities (27%), and 5.) Ethics (18%). The specific content that successful test candidates must master may be located through: https://nmlsportal.csbs.org/csm?id=kb_article_view&sysparm_article=6792&sys_kb_id=bb0314f0db3d37008410388d7c9619ea
Individuals frequently pursue licensure as both real estate and mortgage professionals. Whether or not one can act in multiple capacities on one particular transaction, however, is contingent on the laws of the state in which the subject property is located. It is important to note, however, that, regardless of state law, if a USDA mortgage is financing the subject property, nobody may act in a dual capacity on that transaction regardless of the state’s laws. As such, the mortgage loan originator would be prohibited from simultaneously acting as the real estate agent just as the real estate agent would be prohibited from representing both the seller and the buyer.
No. Although a mortgage loan originator who works for a depository institution that is regulated by a federal banking regulator or the Farm Credit Administration (FCA) needs to be registered through the NMLS, he or she is not required to secure licensure as a mortgage loan originator.
Although the income range can vary greatly based on the type of company for which an individual originates mortgage loans and their various compensation structures, it is realistic for a competent and diligent mortgage loan originator to earn well over $100,000 annually. First-year income expectations, however, would range anywhere from $20,000 – $50,000 as the new loan originator establishes him or herself, forges a mutually-rewarding network of referral sources, builds a pipeline, and establishes his or her professional reputation.
No. Of the 120 test questions with which the test taker is presented, five of those questions are test test-questions. These five questions count neither towards nor against the test taker’s overall test score. Since the test taker does not know which of the 120 questions are test test-questions, he or she must treat every question as if it was a live question.
To pass the NMLS exam, test takers must score a grade of 75% or higher.
The NMLS exam contains 120 multiple-choice questions, each with four answer options.
Test takers have slightly over three hours to complete their exam.
The NMLS was created by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) in 2008. It is owned and operated by the State Regulatory Registry, LLC (SRR), a wholly-owned subsidiary of the CSBS.
If your goal is to originate mortgage loans for a non-depository institution that is not regulated by a federal banking regulator or to become a contract mortgage underwriter or contract mortgage loan processor, you must be state-licensed to do so. Licensees must carry licenses issued by each state where the properties on which they want to originate mortgage loans are located. The licensing candidate must first register through the NMLS, complete a 20-hour pre-licensing education course, complete any state-specific pre-licensing education that may be required by the state(s) in which he or she seeks licensure, and then must pass the 120-question national NMLS exam. Once everything has been successfully completed, he or she may apply for licensure.
NMLS exams may be scheduled through the NMLS’ four-step process: 1.) pay for the exam, 2.) decide how you would like to test, 3.) schedule your exam, and 4.) prepare and test. Additional information may be found through: https://mortgage.nationwidelicensingsystem.org/profreq/testing/Pages/default.aspx
NMLS refers to the Nationwide Mortgage Licensing System, the system of record for non-depository financial services licensing or registration. The NMLS also interchangeably uses the names Nationwide Multistate Licensing System, the Nationwide Mortgage Licensing System & Registry (NMLSR), and the Nationwide Multistate Licensing System & Registry (NMLSR).
Yes. The NMLS exam is offered through a live-classroom and an online modality. To learn everything necessary to take the NMLS exam online, please visit: https://nmlsportal.csbs.org/csm?id=kb_article_view&sys_kb_id=f602b8c71b59b0d0761263dbe54bcb59
The key to passing the NMLS exam is learning everything on which you can be evaluated. Whether it’s your first attempt or fifth, the successful test candidate must master everything appearing on the NMLS Test Content Outline and be able to effectively navigate the exam’s tricky nature.
I’m not going to lie. The NMLS exam is a difficult exam to pass. There is a lot of material that the test candidate must master and there is simply no way around that. But, with the appropriate studying and preparatory efforts, the NMLS exam is absolutely passable.
The number one reason people fail the NMLS exam is that they are not studying effectively or adequately. No 20-hour course alone can prepare anyone for the NMLS exam. NMLS test candidates should refrain from scheduling their exam immediately after completing their 20-hour course. Successful preparation requires dedicating time, every day, to comprehensively and appropriately studying for the NMLS National Licensing exam.
As of October 1, 2021, the NMLS reports that the overall pass rate for NMLS exams administered between October 1, 2019 and September 30, 2021 is 52%.
The NMLS Exam Prep Webinar, “Maximizing Your Success” teaches the strategies needed to pass the NMLS exam. You may access a live or recorded version of this online seminar at https://www.onlineed.com/mlotestprep and a recorded version of it through https://safeexamtraining.com/training-videos/.
Absolutely! The NMLS exam is tricky. Successful test candidates should both master the material and know-how to strategically navigate the NMLS exam’s tricky nature.
Everyone learns differently, in different capacities, and at different paces. There is no defined amount of studying that will guaranty test readiness. Test candidates who are thoroughly familiar with everything appearing on the NMLS Test Content Outline, who consistently score in the mid-to-high 90’s on quality practice exams, and who are able to articulately discuss the required material exude a high degree of exam readiness.
The litmus test indicating exam readiness is when the test candidate is thoroughly familiar with everything appearing on the NMLS Test Content Outline, can execute articulate conversations of the test content, is consistently scoring in the mid-to-high 90’s on quality practice exams, and has mastered the strategies needed to overcome the exam’s tricky nature.
Yes, but it’s a passable exam! There’s a reason, however, why 48% of those who take it are never able to pass. Actually, there are a few. The primary reason is because the 20-hour pre-licensing course, the primary means for preparing people for this exam, requires the effective delivery of approximately 150 hours’ worth of material. As such, no 20-hour course, by itself, can properly prepare anyone for this exam. Appropriate study and preparation practices, beyond one’s 20-hour course, are mandatory towards ensuring a positive test outcome. Read on to learn more about the study and test-preparation strategies necessary for passing the NMLS MLO National Licensing Examination.
No mortgage loan originator licensing candidate may have, without formal pardon, been convicted of, or pled guilty or nolo contendere, to a felony in a domestic, foreign, or military court during the seven-year period preceding the date of the application for licensing and registration or at any time preceding such date of application if the felony involved an act of fraud, dishonesty, a breach of trust, or money laundering.
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