New NMLS Test Guidelines 2017


Federal Mortgage-Related Laws (23%)

  • A. Real Estate Settlement Procedures Act (RESPA), Regulation X
  • B. Equal Credit Opportunity Act (ECOA), Regulation B
  • C. Truth-in-Lending Act (TILA): Regulation Z
    • 1. Home Ownership and Equity Protection Act (HOEPA Section 32)
    • 2. High Price Mortgage Law (HPML Section 35)
    • 3. Loan Originator Compensation
  • D. TILA-RESPA Integrated Disclosure Rule (TRID)
  • E. Other Federal laws and guidelines
    • 1. Home Mortgage Disclosure Act (HMDA)
    • 2. Fair Credit Reporting Act (FCRA)/Fair and Accurate Credit Transactions Act (FACTA)
    • 3. Privacy protection / Do Not Call
    • 4. FTC Red Flag rules
    • 5. Dodd-Frank
    • 6. Bank Secrecy Act/Anti-Money Laundering (BSA/AML)
    • 7. Gramm-Leach-Bliley Act – Privacy and FTC Safeguard Rules
    • 8. Mortgage Acts and Practices – Advertising (Regulation N)
    • 9. Electronic Signature in Global and National Commerce Act (E-SIGN Act)
    • 10. USA PATRIOT Act
    • 11. Homeowners’ Protection Act
  • F. Regulatory authority
    • 1. Consumer Financial Protection Bureau (CFPB)
    • 2. Department of Housing and Urban Development (i.e., HUD, related to fair lending and fair housing)

General Mortgage Knowledge (23%)

  • A. Qualified and Non-qualified Mortgage programs
    • 1. Conventional/conforming (e.g., Fannie Mae, Freddie Mac)
    • 2. Government (e.g., FHA, VA, USDA)
    • 3. Conventional/nonconforming (e.g., Jumbo, Alt-A)
      • a. Statement on Subprime Lending
      • b. Guidance on Nontraditional Mortgage Product Risk
      • c. Non-qualified mortgage (Non-QM)
  • B. Mortgage loan products
    • 1. Fixed
    • 2. Adjustable
    • 3. Balloon
    • 4. Reverse mortgage
    • 5. Home equity (fixed and line of credit)
    • 6. Construction mortgage
    • 7. Interest-only
  • C. Terms used in the mortgage industry
    • 1. Loan terms
    • 2. Disclosure terms
    • 3. Financial terms
    • 4. General terms

Mortgage Loan Origination Activities (25%)

  • A. Application information and requirements
    • 1. Application accuracy and required information (e.g., 1003)
      • a. Borrower
      • b. Loan originator
      • c. Verification and documentation
    • 2. Suitability of products and programs
    • 3. Disclosures
      • a. Accuracy (e.g., tolerances)
      • b. Timing (e.g., Loan Estimate, Closing Disclosure, Homeownership Counseling Disclosure)
      • c. Delivery method (e.g., electronic, mail, face-to-face)
  • B. Qualification: processing and underwriting
    • 1. Borrower analysis
      • a. Assets b. Liabilities
      • c. Income
      • d. Credit report
      • e. Qualifying ratios (e.g., housing, debt-to-income, loan-to-value)
      • f. Ability to repay
      • g. Tangible net benefit
    • 2. AppraisalsCopyright © 2015. SRR. All rights reserved.
    • 3. Title report
    • 4. Insurance: hazard, flood, and mortgage (PMI, MIP)
  • C. Closing
    • 1. Title and title insurance
    • 2. Settlement/Closing agent
    • 3. Explanation of fees
    • 4. Explanation of documents
    • 5. Funding
  • D. Financial calculations used in mortgage lending
    • 1. Periodic interest
    • 2. Payments (principal, interest, taxes, and insurance; mortgage insurance, if applicable)
    • 3. Down payment
    • 4. Loan-to-value ratios
    • 5. Debt-to-income ratios
    • 6. Temporary and fixed interest rate buy-down (discount points)
    • 7. Closing costs and prepaid items
    • 8. ARMs (e.g., fully indexed rate)
    • 9. Qualified Mortgage monthly payment calculations

Ethics (16%)

  • A. Ethical issues related to federal laws
    • 1. Violations of federal law
    • 2. Prohibited acts
    • 3. Fairness in lending
    • 4. Fraud detection
    • 5. Advertising
    • 6. Predatory lending and steering
  • B. Ethical behavior related to loan origination activities
    • 1. Financial responsibility
    • 2. Handling consumer complaints
    • 3. Company compliance
    • 4. Relationships with consumers
    • 5. Truth in marketing and advertising
    • 6. Consumer education
    • 7. General business ethics

Uniform State Content (13%)

  • A. SAFE Act and CSBS/AARMR Model State Law
    • 1. Department of Financial Institutions or Mortgage Regulatory Commission
      • a. Regulatory authority
      • b. Responsibilities and limitations
  • 2. State Law and Regulation Definitions
  • 3. License Law and Regulation
    • a. Persons required to be licensedCopyright © 2015. SRR. All rights reserved.
    • b. Licensee qualifications and application process
    • c. Grounds for denying a license
    • d. License maintenance
    • e. NMLS requirements
  • 4. Compliance
    • a. Prohibited conduct and practices
    • b. Required conduct
    • c. Advertising


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