Passing the Licensing Exams

Every loan officer must pass the national component of the NMLS exam if they want to originate mortgages. They must also pass at least one state component (or more than one, if they are licensed in more than one state). Yet, not every loan officer is passing the required exams. At least 25% of loan officers are not passing the national exam on their first try. Are you one of the 25%?

If you are, or if you haven’t taken the test yet, here is a piece of advice. Study for the exam. Don’t just wing it. The feedback that I am getting from my clients is that some of the questions on the exam are about information that you may rarely use as you originate loans. Ideally, the pre-licensing education that you took covered everything that you will be tested on. The reality is that the instructors who are teaching the pre-licensing education may be good or they may be bad and you may be not be taught everything that you need to know. Or you may be taking online education and just breezing through it to get the required hours in. You may think that you already know all of this because you’ve been doing it for 3 or 5 years. Or you are using the certification process to avoid taking the pre-licensing education.

Most of the material tested should be information that you do know off the top of your head and you should get really close to the passing grade without doing much homework. But, if you get too many of those random obscure questions wrong, you will fail the test.

Many employers are taking a hard line about getting your licensing requirements completed. After all, what good are you to them if you cannot originate loans? What good are you to your family if you cannot earn your livelihood? Take the licensing requirements seriously. Do the work that will get you past the hurdle of passing the state and national exams. Study the information that you didn’t know before. Review any books or notes that you took during your pre-licensing education. If you didn’t take pre-licensing education, find a cram course that is specifically geared towards passing these exams. Your job may depend on it.

Contact Robin Gronsky at Rgronsky@Gronskylaw.com if you want to explore expanding into new states or need help with your licensing applications (company or loan originator). I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.

Don’t Miss Your Deadline of July 31st

A large number of states have imposed a July 31, 2010 deadline for loan officers to complete their licensing requirements. In some states, all loan officers are subject to the same deadlines. In other states, loan officers who transitioned to the Nationwide Mortgage Licensing System at different times were deemed “licensed” on a certain date and their deadlines may be different from other loan officers (who even work in the same office) who were deemed “licensed” on a different date. You need to know which category of licensee you fall into and what your deadlines are. If you miss your deadline, you may not be able to originate loans once the deadline for licensing passes.

You should check the chart at http://mortgage.nationwidelicensingsystem.org/profreq/Documents/SAFE%20Compliant%20Requirements.pdf for the deadlines of each state in which you are or wish to be licensed to ensure that you meet your deadlines. The chart gets updated every few weeks so you may want to bookmark it and re-check periodically. Do not wait for the last week of July to try to complete your requirements. If the regulatory agency in your state is inundated with last-minute test results, criminal background checks, or other required documentation, they may not be able to process everything in a timely manner. And you will be left waiting.

Contact Robin Gronsky at Rgronsky@Gronskylaw.com if you want to explore expanding into new states or need help with your licensing applications (company or loan originator). I’ll keep what you tell me confidential but I cannot give you any specific legal advice until you become a client of the firm. This is done by written agreement only.