What to Expect on the NMLS Exam
For people involved in the real estate and financial services industries, one of the key components of career advancement as well as improving customer service is being licensed or certified in their fields. One of the most well-respected exams in these industries is the Nationwide Mortgage Licensing System exam, also known as the NMLS exam. A test that allows those who pass it to become mortgage specialists, it’s a comprehensive exam that offers a variety of topics related to mortgages.
The National Test with Uniform State Content consists of 125 questions and takes just over three hours to complete. The cost to take the test can range from $69-$110, and after taking the test results are sent by email within 72 hours. If a person fails the test the first time, they can retake it within 30 days. After three failed attempts, a 180-day waiting period must be met before trying again.
Questions are mostly multiple-choice and deal with numerous subjects regarding mortgages. Each section of the test is weighted, with sections related to mortgage law carrying the most weight. The General knowledge section contains questions on mortgage programs such as the FHA or VA as well as mortgage products such as fixed and adjustable mortgages. Many questions regarding federal mortgage laws are also on the test, including the Truth in Lending Act and the Equal Credit Opportunity Act.
Along with these sections, the exam also consists of questions regarding loan origination, ethics and uniform state content. The ethics section deals with how various ethical issues arise with such professionals as real estate agents, underwriters, appraisers and consumers themselves. The Uniform State content section focuses on such things as the SAFE Act and various state laws and regulations involving who is able to be licensed, how to maintain a license and grounds for being denied a license.
When taking the exam, it’s important to remember the reasons for doing so. Not only does having a thorough knowledge of the mortgage industry help in doing one’s job, but it also allows much better service to be given to customers. Purchasing real estate is one of the biggest transactions most consumers commit to doing, so it’s vital they understand each and every aspect of the transaction. By passing this exam and becoming skilled in the many aspects of mortgages, consumers can trust the information you give them is accurate and current.
Books to Consider:
What is on the NMLS Exam?
The NMLS exam is a test for individuals looking to gain entry into the mortgage profession as either a mortgage broker or mortgage lender employee. The test ensures that each candidate has obtained the knowledge and skills to effectively work in the industry. Beyond the basics of mortgage approval, the exam has questions that are aimed at testing the candidate’s knowledge of mortgage laws, lending ethics and more.
Federal Mortgage Laws: 25 Percent of the Test
This section of the test includes 11 different subjects that are directly related to federal mortgage laws, including Truth-in-Lending, the Fair Credit Reporting Act, Home Ownership and Equity Protection and Consumer Financial Protection Bureau rules and regulations.
Mortgage Knowledge: 21 Percent of the Test
This part of the test includes roughly 9 subjects related to mortgage knowledge and the different types of mortgages available. Candidates are expected to have a thorough understanding of a variety of mortgage and financial-related terms, government-backed mortgages, subprime lending, conventional loans, reverse mortgages, balloon payments, fixed rate mortgages, home equity loans, construction loans and more.
Mortgage Loan Origination: 21 Percent of the Test
The mortgage loan origination section tests the candidate’s knowledge regarding the origination process in 5 different subjects. From qualification and underwriting to borrower analysis, government program guidelines, closing processes and more, test-takers should be well-versed in how to analyze, underwrite and close borrowers for multiple programs.
Mortgage Lending Ethics: 10 Percent of the Test
Knowledge of ethics is essential to the mortgage business, and help protect the consumer from unsavory lending practices and the lender from breaking the law. Some subjects in the section include general lending ethical behavior for different mortgage career positions, fraud detection, RESPA, the Equal Credit Opportunity Act, the Truth-In-Lending Act and more.
State Regulations: 18 Percent of the Test
Many states have their own regulatory requirements for mortgage lending. Some of the information in this section includes compliance, advertising, NMLS requirements, license maintenance, individuals that must be licensed, regulatory authorities and more.
For mortgage license candidates, it’s important to remember that mortgage and lending legislation changes nearly every year. Check with your local state regulator or testing authority to ensure your studies include up-to-date information. If you plan on obtaining a mortgage license in multiple states, you’ll have to be knowledgeable about regulations in each state before taking the test.
These Books May Help You Pass your Exam: