Applicants for mortgage originator licenses who fail their national and state exams don't do very well if they decide to take the tests over again.
"If you passed the first time, you are in good shape," Pete Marks of the Conference of State Bank Supervisors said at the American Association of Residential Mortgage Regulators' annual conference in St. Louis. "But it's a different story for those who retake the exams."
Marks, who is part of the CSBS team responsible for implementing the Nationwide Mortgage Licensing System and the SAFE Act requirements, said that less than half of those who take the national test a second time earn a passing grade.
The pass-fail rate is a bit better for applicants who retake their state exam. But even then, just 62% of those folks pass the test when they take it again.
Marks also reported that "a number" of applicants have taken the test four times and failed all four times, and that "several" have flunked the test on five separate occasions. Applicants who fail four tests cannot retake the exams for six months.
According to Marks, the vast majority of applicants who fail the tests are already working in the mortgage business.
The pass-fail ratio for those taking the exams for the first time is 71% for the national test and 81% for their respective state quiz. When retake results are included, the overall pass-fail rate is 65% for the national exam and 79% for the state tests.
