03/26/2024
Here's a breakdown of the topics covered in the NMLS exam
Federal Mortgage-Related Laws (23%)
Truth in Lending Act (TILA)
Real Estate Settlement Procedures Act (RESPA)
Equal Credit Opportunity Act (ECOA)
SAFE Mortgage Licensing Act
Fair Credit Reporting Act (FCRA)
Gramm-Leach-Bliley Act (GLBA)
Other federal regulations relating to consumer protection, fair lending, and anti-money laundering.
General Mortgage Knowledge (23%)
Basics of mortgage lending concepts
Conventional, FHA, VA, and USDA loan programs
Loan terms and amortization
Underwriting guidelines
Loan to Value (LTV), Debt to Income (DTI) ratios
Mortgage Loan Origination Activities (25%)
Taking and processing applications
Disclosures and documentation requirements
Pre-qualification and pre-approval of borrowers
Working with realtors, appraisers, and title companies
The closing process
Ethics (16%)
Fraud, misrepresentation, and predatory lending practices
Fair and responsible advertising
Consumer privacy and data protection
Uniform State Content (13%)
Specific state licensing laws and regulations
State-specific definitions and concepts
What are the type of questions show up on NMLS Exam?
The NMLS exam features mixed type of multiple-choice questions. Here's what you can expect:
Types of Questions:
Knowledge-based: These test your understanding of basic mortgage concepts, terminology, and calculations.
Example: "What is the primary purpose of an appraisal?"
Regulation-specific: A large portion of the exam focuses on federal mortgage-related laws and regulations. You'll need to know how they apply to different situations.
Example: "A loan originator provides a Loan Estimate to an applicant three days after receiving a complete application. Which regulation has been violated?"
Situational/Scenario-based: These present realistic scenarios and ask you to make decisions based on regulations, ethics, or best practices.
Example: "A borrower's debt-to-income ratio exceeds the lender's guidelines. The loan originator suggests the borrower omit a recurring debt from the application. What is the appropriate action for the loan originator to take?"
Math-based: There will be some calculations, mainly focusing on:
Loan-to-value (LTV)
Debt-to-income (DTI)
Interest rates and payments
