ST. LOUIS—Many mortgage originator license applicants 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 here last month. “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 little better for applicants who retake their state exam. But even at that, 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 test.
But on the plus side, three loan originators have taken 42 exams to be licensed in those respective states.
Marks also told the regulators at the conference that there is “no truth” to press reports that applicants can’t get seats to take the tests in their respective states.
While it is possible that those who wait until the last minute to take the exams may not be able to find a place in the testing hall, he told the regulators “plenty of testing seats are available” on a regular basis.
According to Marks, as of June 30, 227 course providers had been approved by CSBS, as has 637 different courses—509 for licensing applicants and 128 as continuing education. As of July 30, he added, the number exceeds 700.
The tests are available in three formats—in the classroom, in a classroom “equivalent” and online.
