AAA Mortgage Training

How to schedule NMLS SAFE Exam

How to schedule your NMLS SAFE exam, follow the below instructions to pay for your Mortgage Loan Originator National Component Exam and then proceed to schedule the exam at a location near you or use the NMLS remote prociting exam to take the test in your home. Get our top rated NMLS Test Preparation Program here.

Schedule your NMLS Test, the National Component Exam with the Uniform State Test

1. Buy and schedule your SAFE 20 Hour Course Bundle with Test Prep at www.AAAMortgageTraining.com/product/safe20oil 

2. Log into your NMLS account, https://www.statemortgageregistry.com/Public/Login.aspx make sure you are in the "State non-depository" section, on the top right area click "MLO education and Testing" then select "pay for an exam" choose your state or any state from the list, all states lead to the same exam "MLO SAFE Exam" later labeled the "National Component Exam with the Uniform State Test (UST)". 

3. Pay the $110 exam fee, after several minutes your enrollment window will be populated to your account. Scroll down slightly and schedule your exam. Choose your projected "exam ready" date typically 1-2 weeks after completing your 20 hour course. If the first available is several weeks later than that, book that appointment as a back up plan. 

4. If needed, then diligently get ready early, once consistently scoring 80+% on our mock exams, visit the exam administrator's website at www.ProMetric.com/NMLS and look for a cancellation. Learners who failed to adequately prepare for their appointment typically cancel their appointment 2-5 days prior the date. Users who cancel 2 business days prior to their appointment do not lose their exam fee and can book another appointment without an additional charge. Our new MLO licensees have been very successful employing this tactic!

Our NMLS SAFE Exam Test Preparation Program Works

We used the National Exam Outline to create our SAFE 20 hour course outline to build a rock solid foundation for your success in our unrivaled test preparation program. When you put in the work using our powerful program the passing results follow. Scroll down to the bottom of this page for testing success tools. Click here If you have already recently taken a SAFE 20 Hour Course and need help passing the NMLS exam

The NMLS National Test Content Outline Click here to down load the Exam outline in a PDF file

 STRUCTURE OF THE SAFE MLO TEST The test consists of 120 multiple-choice items (115 scored test questions and 5 unscored test questions) that are distributed among the five major content areas listed in the table below.

Content AreaPercentage of Test
Federal Mortgage Related Laws23%
General Mortgage Knowledge23%
Mortgage Loan Origination Activities
25%
Ethics16%
Uniform State Content13%


Federal Mortgage Related Laws 23%

A.    Real Estate Settlement Procedures Act (RESPA), 12 CFR Part 1024 (Regulation X)

1.    Subtopics

a.    RESPA origins and purpose

b.    Definition of “mortgage broker”

c.    Knowledge of the prohibitions, limitations and exemptions set by RESPA

d.    Types of loans for which RESPA is applicable

e.    Settlement services

f.    Required disclosures to the customer for a mortgage loan originator (MLO) who is also a real estate broker

g.    Required disclosures to the customer for an MLO who is also a mortgage broker

h.    Bona fide discount points and application during a mortgage loan origination

i.    Required information from a borrower that must be included on an application (Regulation X)

j.    Knowledge of third party settlement service providers

k.    Overview of the foreclosure process

l.    Initial escrow statements

m.    Changes that can be made to the HUD-1/Good Faith Estimate

n.    Issuing a Good Faith Estimate when not all information has been provided

B.    Equal Credit Opportunity Act (ECOA), 12 CFR Part 1002 (Regulation B)

1.    Subtopics

a.    Factors that cannot be used to discriminate 

b.    Notifying borrower of action taken

c.    General permissible acts under the ECOA

d.    Circumstances when it is acceptable to deny credit/loan

e.    Components of a “notice of adverse action”

f.    Definition of “adverse action”

g.    General provisions of Regulation B

h.    Exceptions to providing the appraisal report

i.    “Prohibited factors”

j.    Required disclosures when an application is denied

k.    Acceptable terms used to describe marital status

l.    Adverse action notice, including when multiple applicants/guarantors are on the loan request

m.    Definition of “elderly”

n.    “Disparate treatment” scenarios

o.    Requirement for a co-signer

p.    Factors considered when determining creditworthiness

q.    Types of acceptable income considered in a loan review

r.    Requests for missing application information

s.    Adverse action scenarios

t.    Information required on a loan application

u.    Adverse action characteristics

v.    Timeframe for sending an adverse action to an applicant

w.    Actions an MLO should take when a borrower refuses to provide ethnic, race or gender information

C.    Truth in Lending Act (TILA), 12 CFR Part 1026 (Regulation Z)

1.    Subtopics

a.    “Notice of right to rescind”

b.    Permissible fees and finance charges

c.    Advertisement requirements

d.    Knowledge of the core concepts of TILA

e.    Total points and fees threshold

f.    Definition of “finance charge”

g.    Definition of “APR”

h.    Loans covered by the TILA

i.    Definition of “business day”

j.    Permissible APR tolerances

k.    Definition of “dwelling”

l.    Definition of “residential mortgage loan”

m.    Definition of “business day” in a mortgage rescission

n.    Classifying “seller contributions”

o.    Refinancing scenarios with rights to rescind certain types of transactions

2.    Home Ownership and Equity Protection Act (HOEPA), High-cost Mortgages, HOEPA Section 32, 12 CFR 1026

a.    Minimum term for a balloon payment

b.    Examples of “covered loans”

c.    What is allowed under HOEPA

d.    Limitations on broker fees

e.    Entity that enforces HOEPA

f.    Types of loans/lines of credit subject to HOEPA

3.    Higher-priced Mortgage Loans (12 CFR 1026.35)

a.    Definition of “high-priced/cost mortgage”

b.    Prohibitions within “high-priced mortgages” 

c.    Refinance mortgage loans

4.    MLO Compensation (12 CFR 1026.36(d))

a.    MLO compensation basis

b.    The rules for who may compensate an MLO

D.    TILA-RESPA Integrated Disclosure Rule (TRID) (“Know Before You Owe”)

1.    Subtopics

a.    Disclosure time frames

b.    Section on disclosure where origination charges are reflected

c.    Affiliated Business Disclosure

d.    Special information booklet

e.    Borrower information included on Regulation Z

f.    Required disclosures

g.    Timing of disclosures provided to an applicant

h.    Types of permissible fees and finance charges

i.    Circumstances under which a Loan Estimate may be amended

j.    General information about TRID

k.    Examples of “change of circumstance”

l.    Borrower information that is included on an application

m.    Information that must be disclosed to consumers upon request

n.    Explanation of an APR

o.    Party required to provide the Loan Estimate

p.    Types of loans covered under TILA

q.    Actions an MLO must take when there is incomplete information on a TRID disclosure

r.    Scenario violations of TRID

s.    A borrower’s right to rescission

t.    Definition of “loan consummation”

u.    Information that must be disclosed on a Loan Estimate

v.    Facts about Loan Estimate

w.    Informing a borrower of other loan considerations

x.    Charges/fees disclosed

y.    Information included on a Closing Disclosure

z.    Information that must be disclosed in an annual escrow statement aa. Acceleration definition

bb. The right to receive an appraisal report

E.    Other Federal Laws and Guidelines

1.    Home Mortgage Disclosure Act (HMDA), 12 CFR Part 1003 (Regulation C)

a.    Mortgages in reportable data

b.    HMDA definition of “dwelling”

c.    Information included in borrower data

d.    Information that a borrower must include on an application

e.    Information about which an MLO should not inquire

f.    Information provided by the borrower regarding the right of refusal

2.    Fair Credit Reporting Act (FCRA)/Fair and Accurate Credit Transactions Act (FACTA) 15 USC § 1681 et seq.

a.    Definition of a “fraud alert”

b.    Information included in a “consumer report”

c.    Permissible times when a credit report may be accessed

d.    Requirement to develop policies and procedures regarding identity theft

e.    Definition of “creditor”

f.    Information included in a FACTA disclosure 

g.    Length of time a bankruptcy will show on a credit history

h.    Credit score evaluation methods

3.    Federal Trade Commission Red Flag rules, 16 CFR Part 681

a.    Parties subject to “red flag” rules

b.    Enforcement authority for “red flag” rules

4.    Bank Secrecy Act/Anti-money Laundering (BSA/AML)

a.    Requirement that companies protect consumer information

b.    Facts about Suspicious Activity Reports (SARs)

c.    Circumstances that require filing a SAR

d.    SAR privacy requirements

5.    Gramm-Leach-Bliley Act (GLBA) – Privacy, Federal Trade Commission Safeguard Rules and Do-Not-Call

a.    Non-public information regarding a customer

b.    Permissible use of non-public information regarding a customer

c.    Purpose of act

d.    Requirement for written privacy policy disclosures

e.    Acceptable delivery methods for a privacy notice

f.    Permissible hours for telephone calls

g.    Written policies for maintaining do-not-call lists

h.    Precautions to protect customer information

i.    Purpose of the National Do-Not-Call Registry

j.    Permissible solicitation scenarios

k.    Do-not-call request

l.    Retention of information after a solicitation

6.    Mortgage Acts and Practices – Advertising, 12 CFR Part 1014 (Regulation N)

a.    Advertisements referring to specific credit terms

b.    Length of time required to retain advertisements

c.    Information required to be included in an advertisement

d.    Triggering terms that require additional disclosure

e.    Violations of the act

7.    Electronic Signatures in Global and National Commerce Act (E-Sign Act)

a.    Required E-Sign disclosures

b.    Borrower’s consent regarding access to information in electronic format

c.    Requirements for maintaining records in electronic format

d.    Ways to verify a borrower’s identity

8.    USA PATRIOT Act

a.    Primary purpose of the act

b.    Major functions of the act

c.    Confidential nature of filing reports

d.    Ways to verify a borrower’s identity

e.    Parties subject to the act

f.    Requirement to have a customer identification program in place and verification of the identities of borrowers

9.    Homeowners’ Protection Act (Private Mortgage Insurance (PMI) Cancellation Act)

a.    Major functions of the act

b.    Documents that must be provided to a borrower at loan consummation

10.    Dodd-Frank Act

a.    Re-financing situations

b.    Law oversight over TRID 

F.    Regulatory Authority

1.    Consumer Financial Protection Bureau (CFPB)

a.    Federal oversight of the CFPB

b.    Functions performed by the CFPB

c.    CFPB oversight authority

d.    Filing complaints with CFPB

2.    Department of Housing and Urban Development (HUD)

a.    Primary function of HUD

b.    Programs offered by HUD

c.    Number of housing agencies required to be listed on the housing counseling disclosure

d.    Types of loans that trigger the requirement for a counseling agency to consult with a borrower

e.    Entities that HUD oversees

f.    Fair housing law protections (e.g., health status, etc.)

General Mortgage Knowledge 23%

A.    Qualified and Non-qualified Mortgage Programs

1.    Subtopics

a.    Features of a qualified mortgage

b.    Allowable points and fees for qualified mortgages

c.    Information used to determine whether a loan is qualified

d.    APRs that make a mortgage qualified

e.    Categories of qualified mortgages

2.    Conventional/conforming (e.g., Fannie Mae, Freddie Mac)

a.    Responsibilities of Fannie Mae and Freddie Mac

b.    Limits on closing cost concessions

c.    Fee charges on loans with certain risk characteristics

d.    Fannie Mae/Freddie Mac’s automated underwriting systems

e.    Requirements when purchasing a non-owner occupied rental property

f.    Acceptable down payment amounts

g.    Hazard insurance requirements

h.    Pre-payment requirements

3.    Government (e.g., FHA, VA, USDA)

a.    Definition of “FHA mortgage”

b.    Facts about FHA loans

c.    Definition of “FHA”

d.    Facts about USDA loans

e.    Facts about VA loans

f.    Prohibition on mortgage insurance

g.    FHA interest rate calculation scenarios

h.    Types of government guarantors

i.    Definition of “entitlement”

j.    Certificate eligibility requirement

k.    Acceptable funds for a down payment/closing costs

l.    Properties eligible for FHA purchase transactions

m.    FHA loan limits

n.    VA funding fees

o.    Upfront mortgage insurance premiums

p.    Residual income qualification test 

q.    Required documentation

r.    Monthly mortgage insurance payment scenarios

s.    Minimum down payment for an FHA loan

4.    Conventional/nonconforming (e.g., Jumbo, Alt-A)

a.    Facts on “jumbo loans”

b.    Definition of “nonconforming loan”

c.    Examples of “nontraditional loans”

d.    Requirements for an escrow account associated with a “high-priced loan” or “high- cost loan”

e.    Statement on Subprime Lending

i.    Definition of “payment shock”

ii.    Definition of “subprime”

iii.    Characteristics of ARMs

iv.    Definition of a debt-to-income ratio assessment

v.    Examples of credit risk characteristics

vi.    Scenarios to determine when a balloon loan may be appropriate for a borrower

vii.    Characteristics of subprime borrowers

viii.    Characteristics of a subprime mortgage

a)    Stated income loans

b)    Non-income verifying loans

f.    Guidance on nontraditional mortgage product risk

i.    Characteristics of a non-traditional mortgage loan

ii.    Risks of non-traditional mortgage products

iii.    Re-payment capacity of a borrower

iv.    Identifying the right non-traditional mortgage product for borrowers

v.    Communications with consumers regarding non-traditional mortgage products

g.    Non-qualified mortgage (Non-QM)

i.    Features of a non-qualified mortgage

ii.    Types of non-qualified mortgages

B.    Mortgage Loan Products

1.    Subtopic

a.    Purchase Money Second Mortgages

2.    Fixed

a.    Characteristics of a fixed-rate mortgage

b.    Comparisons of types of loans (scenarios)

c.    Situations that affect a fixed-rate mortgage payment

d.    Percentage of pay down required to lessen monthly payments

e.    Fixed-rate mortgage with escrow

3.    Adjustable

a.    Payment options for an ARM

b.    Facts on margin with respect to ARMs

c.    Facts on the index with respect to ARMs

d.    Definition of “fully indexed rate”

e.    Examples of ARMs

f.    Scenarios resulting in a change in monthly payments

g.    Facts on ARM loans

h.    Fully indexed rate scenarios

i.    Scenarios reflecting payments increasing/decreasing on “change date”

j.    Timeline for notifying a customer of a rate change

k.    Factors when determining interest rates 

l.    Calculating a borrower’s monthly payment

m.    Disclosures

n.    Consumer Handbook (CHARM Booklet)

4.    Balloon Mortgage Loan Products

a.    Facts about balloon mortgages

b.    Types of balloon mortgages

c.    Lender requirements

d.    Scenarios to determine when a balloon loan may be appropriate for a borrower

5.    Reverse Mortgage

a.    Facts on reverse mortgages

b.    Timeline for calculating interest on home equity conversion mortgage loans

c.    Payments required after closing on a conversion mortgage loan

d.    Age requirements for conversion mortgages

e.    Amount of title insurance

f.    Permissible percentage of total equity allowed for withdrawal

g.    Scenarios that cause the full balance to become due

h.    Requirements of reverse mortgage advertisements

i.    Required disclosures

6.    Home Equity Line of Credit (HELOC)

a.    Examples of open-ended credit loans

b.    Characteristics of a HELOC

7.    Fundamentals of Construction Mortgages

a.    Definition of “construction loan”

b.    Classifying the disclosure of financing by the same creditor when constructing a home

c.    Required payments on a construction loan

d.    Facts on “construction to permanent” financing programs

8.    Interest-only Mortgages

a.    Facts about interest-only mortgages

b.    Facts on interest-only payments

9.    Other Mortgage Products

C.    Terms Used in the Mortgage Industry

1.    Loan terms

a.    Junior liens

b.    Subordinate loans

c.    Escrow accounts

d.    High-priced mortgages

e.    Table funding

f.    Rate lock agreement

g.    Tolerances

h.    Legal title granted via a mortgage

i.    Types of mortgages a lender cannot be forced to repurchase

j.    Facts on liens

k.    Delinquent loan

l.    High-cost loans

m.    Early payment default

n.    Foreclosure

2.    Disclosure terms 

a.    Yield spread premiums

b.    High interest rates

c.    Federal mortgage loans

d.    Qualified mortgage

e.    Servicing transfers

f.    Lender credits

3.    Financial terms

a.    Discount points

b.    2-1 buy-down

c.    Accrued interest

d.    Loan-to-value (LTV) ratio

e.    Settlement

f.    Finance charges

g.    Loan origination fee

h.    Debt ratio

i.    Daily simple interest

j.    Premium pricing

k.    Lender credit

4.    General Terms

a.    Subordination

b.    Conveyance

c.    Cash out refinance

d.    Prepaids

e.    Underwriting

f.    Secondary market

g.    Third-party providers

h.    Primary mortgage market

i.    Nontraditional mortgages

j.    Consumer credit

k.    Mortgage lender

l.    Mortgage investor

m.    Loan payment collection

n.    Assumable loan

o.    Examples of origination service

p.    Assigned loan

q.    Payment shock

r.    APR

s.    Average prime offer rate (APOR)

A.    Loan Inquiry and Application Process Requirements

1.    Subtopics

a.    Information on Form 1003

b.    Handling credit report discrepancies

c.    Acceptable gift donors

d.    Information provided to a borrower in response to a loan inquiry

2.    Loan Inquiry Process

a.    Required disclosures that must be provided to a borrower in response to a loan inquiry 

b.    Application accuracy and required information on an application (e.g., name, Social Security number, address of property to be financed, estimated property value, income, loan amount)

3.    Application Process

a.    Questions on a borrower application

i.    How MLOs accept loan applications

ii.    Offering and negotiating the terms of a loan

iii.    How MLOs manage information on an application

iv.    Permissible questions on an application

b.    Verification and documentation

i.    Forms used to authorize the release of information

ii.    Methods of verifying income and assets

a)    Percentage of bank account assets attributable toward a loan application

iii.    Methods of verifying employment

4.    Suitability of products and programs

a.    Reflecting the type of loan on a mortgage application

5.    Accuracy and Timing of Disclosures

a.    Accuracy (e.g., tolerances)

i.    Scenarios and which allowable tolerance

ii.    Service charges subject to a 10% tolerance

b.    Timing

i.    Timing of notification of action taken

ii.    Timing of early disclosures

iii.    Loan Estimate

a)    Timeline of when a Loan Estimate must be provided

b)    Expiration of charges and terms in a Loan Estimate

c)    Time from Loan Estimate to loan consummation

d)    Exceptions to providing the Loan Estimate

e)    Time period for the delivery of the Affiliated Business Arrangement Disclosure

f)    Time period for the delivery of the special information booklet (Know Before You Owe)

g)    Time frame for the consideration for settlement charge before the expiration

h)    Timing of the reissuing Loan Estimates

i)    Timeline of the initial Loan Estimate

j)    Timing of tolerance corrections

iv.    Sending a list of counseling services

a)    Shopping

v.    Valid reasons for a change in circumstance

vi.    Delivery Method

a)    Electronic

b)    Face-to-face

c)    Standard mail

d)    Overnight delivery

vii.    Closing Disclosure

a)    When applicants are entitled to advance inspection of a Closing Disclosure

b)    Initial Closing Disclosure

c)    Timing of disclosures

d)    Final Closing Disclosure

e)    Timeframe of providing an updated Closing Disclosure 

f)    Definition of a business day for delivery purposes

viii.    Homeownership Counseling Disclosure

B.    Qualification: Processing and Underwriting

1.    Borrower Analysis

a.    Assets

i.    Acceptable assets that may be used for a down payment

ii.    Types of classifications of assets (e.g., 401(k))

iii.    Assets permissible to be used toward reserve funds

iv.    Actions not permitted with respect to Verification of Deposits

b.    Liabilities

i.    Liabilities listed on a loan application

ii.    Types of liabilities

c.    Income

i.    Documentation required for a self-employed applicant

ii.    Utilizing capital gains income on an application

iii.    Types of applicable incomes for loan qualification

iv.    Social Security and/or disability income that may be applied toward a loan analysis or as qualifying income

v.    Documentation of work history and income when there has been a gap in employment

vi.    Calculating monthly income

d.    Credit report

i.    Information included on a credit report

ii.    Factors used in determining a credit score

e.    Qualifying ratios

i.    Definition of “capacity”

ii.    Factors when calculating the expense-to-income ratio

iii.    LTV ratios

iv.    Calculating the debt-to-income ratio

a)    Calculating the housing-to-income ratio

b)    Calculating the total debt ratio

f.    Ability to repay

i.    Factors taken into consideration when reviewing an applicant’s ability to repay a loan

ii.    Methods of verifying income/assets

iii.    Determining a borrower’s ability to repay

iv.    Allowable debt to income ratio at loan consummation

v.    Safe harbor provisions and scenarios

vi.    Ability to repay scenarios

g.    Tangible net benefit

h.    Occupancy types

i.    Verification of Deposit scenarios

2.    Appraisals

a.    Purpose of appraisals

b.    Market approach

c.    Income approach

d.    Cost approach

e.    Using comparable information to establish values

f.    Requirement/timeline to inform applicant of the right to receive an appraisal

g.    Facts on appraisals

h.    Definition of “appraisal”

i.    Appraisal requirement with a high-risk mortgage 

j.    Definition of “appraiser”

k.    Ordering an appraisal

l.    Independent appraisal requirement

3.    Title Report

a.    Obtaining title reports

b.    Timing of title reports and commitments

c.    Preliminary title reports

4.    Insurance

a.    Flood insurance

i.    Flood insurance requirements

ii.    Designated zones for flood insurance

iii.    Limits of flood insurance

iv.    Private flood insurance

v.    Force-placed insurance

b.    PMI

i.    Purpose of PMI

ii.    Benefits of PMI

iii.    Facts on PMI and ratios

iv.    Requirement guidelines to ending PMI

v.    LTV ratio that triggers PMI

c.    Hazard/homeowner insurance

i.    Force-placed insurance

d.    Government mortgage insurance

C.    Closing

1.    Title and Title Insurance

a.    Title insurance coverage

b.    Priority in multiple mortgage scenarios

c.    Definition of “easement”

d.    Encumbrances

e.    Reconveyance

2.    Settlement/Closing Agent

a.    Borrower/Seller’s ability to review the HUD-1 Closing Disclosure (CD)Settlement Statement

b.    Eligible signatures on the security instrument

c.    Use of a Power of Attorney (POA)

3.    Explanation of fees

a.    Fees/charges listed on HUD-1 CD Settlement Statement

b.    Title insurance fees

c.    Pre-paid fees

d.    Types of escrow expenses

e.    Loan origination fees

4.    Explanation of documents

a.    Required documents at a closing

b.    Required documents when using a property as collateral

c.    Note disclosures on a loan

d.    Assumption clauses

e.    Providing the escrow analysis statement

5.    Funding

a.    When does a rescission period end? 

b.    Funding regarding rescission periods

D.    Financial calculations used in mortgage lending

1.    Periodic interest

a.    Interest rate calculation scenarios

b.    General facts

c.    Interest per diem facts

2.    Payments

a.    Calculation scenarios for mortgage insurance

b.    Calculation scenarios for interest rates

c.    Calculation scenarios for monthly payments

d.    Calculation scenarios for loan amounts

e.    Effect of escrow on mortgage

f.    Order of payments and importance of payments to the underwriting of loan

g.    Closing Disclosure information

3.    Down Payment

a.    Calculating down payment amounts/percentages

4.    Loan-to-value ratios

a.    Loan-to-value ratio calculation scenarios

5.    Debt-to-income ratios

a.    Debt ratio calculation scenarios

b.    Factors in calculating debt ratios

6.    Discount Points: interest rate buy-downs

a.    Permanent note

b.    Definition of “discount point”

c.    Discount point calculation scenarios

d.    Purpose of discount points

7.    Closing costs and prepaid items

a.    Closing costs/pre-paid items calculation scenarios

8.    ARMs (e.g., fully indexed rate)

a.    Interest rate adjustment calculation scenarios

b.    Payment adjustment calculation scenarios

9.    Qualified Mortgage monthly payment calculations

A.    Ethical issues

1.    Violations of law

a.    Violations of Gramm-Leach-Bliley Act

2.    Prohibited acts

a.    Examples of “redlining”

b.    Acceptable/non-acceptable practices under RESPA

c.    Examples of prohibited acts

d.    Requests for personal information

e.    Examples of “kickbacks”

f.    Duties a loan processor may/may not perform

3.    Fairness in lending

 a.    Definition of a referral and the required associated disclosures, if necessary

b.    Coercion scenarios

c.    Scenarios where the appraiser has a conflict of interest

d.    Discriminating against an applicant

e.    Requirement to treat all applicants with the same level of fairness

4.    Fraud detection

a.    Asset fraud

b.    Red flags on a sales contract

c.    Application red flags

d.    Verifying loan application information

e.    Occupancy fraud

f.    Income fraud

g.    General red flags that could represent fraud

h.    Scenarios surrounding a consumer’s bank activity

i.    Scenarios where information is not provided to a borrower

j.    Employment fraud

k.    Liability fraud

l.    Suspicious activity

5.    Advertising

a.    Scenarios where information is misleading within an advertisement

b.    Bait and switch scenarios

c.    Performing a due diligence review of advertisements prior to publication

d.    Scenarios where “unfair, deceptive, or abusive acts” are undertaken

e.    Examples of lawful advertising

f.    Types of advertisements that are subject to federal regulations

g.    Rules surrounding contact (e.g., “Established business relationship”)

6.    Predatory lending and steering

a.    Definition of “steering”

b.    Scenarios surrounding the proper designations of loans and property types

B.    Ethical behavior related to loan origination activities

1.    Financial responsibility

a.    Permitted fees, payments, and compensation (e.g., Loan Estimate)

b.    Fees that may not increase due to changed circumstances

c.    How fees are handled based on the Loan Estimate

d.    Closing cost scenarios

e.    Settlement scenarios where monies are missing or misused

f.    Scenarios surrounding referral fees

g.    Splitting fees

2.    Handling borrower complaints

3.    Mortgage company compliance

a.    Acceptable practices when acting on behalf of a lender

b.    Scenarios when an MLO discovers material information that should be conveyed to the lender

c.    Scenarios surrounding the information supplied by employers

d.    Requirements for MLOs

4.    Relationships with consumers

a.    Ethical handling of a customer’s personal information

b.    Down payment scenarios

c.    Interest rate adjustment scenarios

d.    Power of Attorney (POA) scenarios 

e.    Permissible reasons for requesting a credit report

f.    Scenarios of notifying the underwriter of a change in the borrower’s application or status

g.    Proper disclosures by MLO if there is a potential conflict of interest

h.    Scenarios surrounding situations with borrower’s and co-borrower’s

i.    Permissible acts regarding the appraisal of a client’s property

j.    Scenarios surrounding situations with borrower’s undisclosed income

k.    Permissible acts after discovering deposits inconsistent with borrower’s income included on application

l.    Scenarios involving a gift received by the borrower

m.    Scenarios of notifying a loan officer if a borrower has applied with other companies for additional mortgages

n.    Scenarios surrounding a borrower providing information on income

o.    Cybersecurity scenarios

5.    Truth in marketing and advertising

a.    Permissible statements/phrases within an advertisement

6.    Borrower education

7.    General business ethics

a.    Scenarios where borrower has provided false information

b.    Scenarios where borrower is seeking advice

c.    Scenarios where the MLO is falsifying information on behalf of a borrower

d.    Providing suitable unsolicited advice to a borrower

e.    Scenarios where outside parties/individuals to the loan, attempt to obtain information on a loan or about a borrower

A. SAFE Act and CSBS/AARMR Model State Law

1.    State mortgage regulatory agencies

a.    Regulatory authority

i.    Regulatory power

ii.    Creation and purpose of the NMLS Registry

iii.    Frequency of investigations and exams

iv.    CFPB authority to conduct exams

v.    Continuing education requirements

vi.    Unique identifiers for MLOs

vii.    CFPB penalty limits

viii.    CFPB Loan Originator Rule

ix.    Authority of state regulator (e.g., audit)

b.    Responsibilities and limitations

2.    Definitions and Documents

a.    NMLS

b.    SAFE Act

c.    Documents to be filed for public record

3.    License Law and Regulation

a.    Minimum requirements for state licensing laws

b.    Persons required to be licensed

i.    Services conducted by MLOs and the requirement to be licensed

ii.    Entities required to use MLOs

iii.    Allowable acts by underwriters

iv.    Clerical/support duties 

v.    Loan processors

c.    Business that individuals may/may not conduct without being licensed as an MLO

i.    General business

ii.    Non-profit institutions

iii.    Business purpose loans (e.g., commercial, non-owner)

d.    Licensee qualifications and application process

i.    Pre-licensing education requirements

ii.    Background checks

iii.    Requirements to becoming an MLO

iv.    Managing felony charges

v.    Waiting period for test retakes

vi.    Sponsorship requirement

vii.    “MLO” and the requirement to be licensed with a state

e.    Grounds for denying a license

i.    Reasons for denying an applicant

f.    License maintenance

i.    Continuing education requirements

ii.    Renewal period

iii.    License renewal lengths and minimum standards

iv.    Continuing education courses approvals

v.    Withholding a record

vi.    Requirements to retake exam if individual has been absent from industry

vii.    Requirement to maintain an active license

viii.    Required continuing education hours completed to renew a license

g.    NMLS requirements

i.    Change of employment and updating NMLS

ii.    Required submissions that applicants must make to the NMLS system

iii.    Required disclosures to NMLS

iv.    Requirement to publicly display an NMLS identifier

v.    Requirement to include the NMLS identifier in certain situations

vi.    Licensed non-depository employees vs registered depository employees in NMLS

4.    Compliance

a.    Authority to examine a licensee’s books and records

b.    Prohibited conduct and practices

i.    Prohibited acts

ii.    Requirement to obtain a unique identifier

iii.    Investigations by state agencies

c.    Required conduct

i.    Individual responsible for providing documents during a complaint investigation

ii.    Required information and record retention

iii.    Assumable mortgage loan products

iv.    Penalties assessed for failure to conduct certain duties

v.    Permissible acts

vi.    Timeline for submitting books and records to a state regulator

vii.    General scenarios regarding mortgage loan origination

viii.    Required information on loan documents

d.    Advertising

i.    Requirement to include NMLS unique ID in advertisements 

National Test Component Reference List


NOTE: The following is a list of the sources used in the development of the National Test Component. It is not intended to be an all-inclusive list but may be used as a guide in preparing to take the test.

12 USC 2601 – REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA)

 12 CFR 1024 – RESPA (REG X)

 12 CFR 1002 – EQUAL CREDIT OPPORTUNITY ACT - ECOA (REGULATION B)

 12 CFR 1026 – TRUTH-IN-LENDING ACT (TILA - REG Z)

Home Ownership and Equity Protection Act (HOEPA) Rule

Escrow Rule

Federal Mortgage Disclosure Requirements under the Truth in Lending Act (Regulation Z)

 12 CFR 1024 1026 – INTEGRATED DISCLOSURES UNDER RESPA (Reg X) AND TILA (Reg Z)

 12 CFR 1003 – HOME MORTGAGE DISCLOSURE (REGULATION C)

 12 CFR 1022 – FAIR CREDIT REPORTING (REGULATION V)

 15 USC 1681 et seq. – FAIR CREDIT REPORTING ACT

 12 CFR 1016 – PRIVACY OF CONSUMER FINANCIAL INFORMATION (REGULATION P)

 15 USC 6101 et seq. DO NOT CALL – TELEMARKETING AND CONSUMER FRAUD AND ABUSE PREVENTION ACT

 15 USC 6151 – DO NOT CALL

 47 CFR 64.1200 – SUBPART L RESTRICTIONS ON TELEMARKETING, TELEPHONE SOLICITATION AND FACSIMILIE ADVERTISTING

 16 CFR 310 – TELEMARKETING SALES RULE 

16 CFR 313 – Privacy of Consumer Financial Information 

16 CFR 681 – IDENTITY THEFT RULES 

31 CFR 1029.320 – Rules for Loan or Finance Companies (AML Rules) 

15 USC 6801-6809 – GRAMM-LEACH-BLILEY ACT 

12 CFR 1014 – MORTGAGE ACTS AND PRACTICES - ADVERTISING (REGULATION N) 

USA PATRIOT Act 

Homeowners Protection Act 

4506-T – Request for Transcript of Tax Return 

HUD Home Equity Conversion Mortgages (HECM) homepage 

The Federal Housing Administration (FHA) 

FHA Mortgage Limits 

VA Purchase & Cash Out Refinance Home Loans 

FHA Handbook 4155.1 

FHA Requirements: Mortgage Insurance 

Consumer Finance Protection Bureau (CFPB)

CFPB: Final Rules

CFPB: Compliance and Guidance 

CFPB Ability to Repay and Qualified Mortgage Standards

CFPB: Balloon Loan

CFPB: Construction Loan

CFPB: Loan to Value Ratio

CFPB: Private Mortgage Insurance

CFPB: Interest Rate and APR

CFPB: Discount Points

CFPB: Right to Rescind

CFPB: Mortgage Payments

CFPB: Property or Flood Insurance 

Consumer Handbook on Adjustable-Rate Mortgages 

The Electronic Signatures in Global and National Commerce Act (E-Sign Act) 

Fannie Mae

Fannie Mae: Loan Limits

Fannie Mae: Selling Guide 

Federal Financial Institutions Examination Council (FFIEC) - The Detection and Deterrence of Mortgage Fraud Against Financial Institutions 

Freddie Mac 

FTC: Real Estate Marketplace Glossary 

CSBS/AARMR Guidance on Nontraditional Mortgage Product Risks 

Title V – S.A.F.E. Mortgage Licensing Act 

State Model Language for Implementation of Public Law 110-289, Title V—S.A.F.E. Mortgage Licensing Act 

12 CFR 1008-- S.A.F.E. MORTGAGE LICENSING ACT—STATE COMPLIANCE AND BUREAU REGISTRATION SYSTEM (REGULATION H)

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