Pre-licensing education and exams

Some of the states, such as Florida, require a certain number of hours of classroom education before you can take a required exam. Other states, such as New Jersey, require you to pass the exam but do not require any licensing education. Should you take a course even if it is not required? Should you take an online course or a classroom course? What are they testing about anyway?

Prelicensing education and passing a test has been required in some states to ensure that a licensed mortgage broker can't just open up an office and start working with borrowers when they have no idea what they are required to do or know. There are state laws and federal laws that apply to each mortgage transaction and a mortgage broker must know all of the laws that pertain to each transaction. Does your state require certain disclosure forms that must be given to each borrower at the beginning of the process? Do you know how long to keep information in the borrrower files? Do you know what documents must be retained in the borrower file? Does RESPA, 1003, GFE mean anything to you? If you are intending to be a mortgage broker or mortgage lender, you are expected to know the answers to these questions for each state in which you are licensed.

If the state requires classroom education, there is no choice about the matter. The only question is from whom you should take the coursework. If the state schedules all test takers for a particular location, then you should take the coursework right before the exam, in the city in which the exam will be given. An example is Florida. Florida reqires 24 hours of classroom education. The exam is given monthly, generally on the 4th Tuesday of the month (but that schedules changes in November and December). If you are an out-of-state applicant, you will be scheduled to take the exam in Fort Lauderdale. I advise my clients to take the classes in Fort Lauderdale on the weekend before they are scheduled to take the exam. This way they are already where they need to be for the exam and by taking the courses right before the test, they will have the best chance to remember what they were taught. My clients have all passed the Florida test.

Other states, like Georgia, require either a certain number of years of full-time mortgage industry experience or a required number of hours of hours of education which must be given by an approved provider. For example, Georgia requires either 2 years of full-time mortgage industry experience or 40 hours of education from a n approved provider (who are listed on the Georgia Department of Banking website). If you live or vacation in Georgia, you can either take classroom education or online courses. You have to know whether you will have the discipline to really learn the material if you use an online course package or whether you need to have a teacher in front of you to answer questions in order to master the laws and regulations that you will be expected to know once you get your license.

Finally, there are states that don't require prelicensing education but do require that you pass a test. Examples of these states are New Jersey and Illinois. Should you take any courses if they are not required? If you have been a loan officer for a number of years in the state in which you will be taking the test, you may already know the material that will be tested. For those license applicants, a course is not necessary. But if you are a new loan officer in that state, or have never closed a loan in that state, take a preparation course. The time and effort it takes to learn the material in the course will help you to pass the exam. Better to be safe than sorry. If you don't pass the test, you will never get your license.