State Regulatory Registry LLC a CSBS company NMLS Testing & Education SAFE Mortgage Loan Originator Professional Requirements VMBA Presentation November/December

State Regulatory Registry LLCa CSBS company

NMLS Testing & Education

SAFE Mortgage Loan Originator Professional Requirements

VMBA Presentation November/December 2009

Thanks to Strategic Information Resources/SIR for providing the Webinar for us

Thanks to NMLS for permission to useExcerpts from the presentation to State Associations on

October 27 & 28, 2009


Nationwide Mortgage Licensing System

Presenting Today

• Sue Clark - Regulatory & Consumer Affairs Director, BISHCA– [email protected] 802-828-4878

• Diane Smith – Executive Director, VMBA– [email protected] 866-680-8622



Conference Call Logistics

• The call will be moderated.• You may enter your questions in the Question Box

at anytime. Your identity will be confidential – Your questions will be read to the group by Diane at the end of the

presentation portion, without disclosing your name or company.

• You may also “Raise your Hand” to verbally ask a question. I’ll unmute your line during the Q&A time if you have raised your hand to indicate you want to speak.

Questions will be answered following the presentation.



Agenda

• Overview: SAFE Professional Requirements

• Testing and Education Presentation

• VMBA Education

• Wrap-up: Q&A



Overview: Professional Requirements

• Title V, S.A.F.E. Mortgage Licensing Act• Professional Requirements

1. Complete Pre-licensing (and Continuing Education)

2. Pass MLO National Test

3. Pass MLO State Component Test

4. Pass a Federal Background Check

5. Authorize Credit Report & Credit Score Pull



Vermont Requirements

• Individuals that are employed by a VT licensed lender or mortgage broker on or before March 31, 2010 have until July 1, 2010 to obtain MLO license.

• Any new individual after April 1, 2010, must have MLO license to engage in mortgage loan origination.

• Individuals whose PE credits are certified in 2010, will not need CE credits to renew for 2011.

• 2011 and thereafter – VT Requires 8 Hrs CE prior to 12/1 annually



MLOs who Work for Depositories

This presentation is targeted to those who MUST meet the SAFE Act Requirements

- But for MLOs who work for Depositories:– You are NOT required to take the Tests– You are NOT required to take PE or CE courses– You MAY take classes and have your credits tracked– You MAY take the SAFE MLO tests– You MAY get a VT MLO License and keep it inactive

– ready if you do change employers.



Testing Requirements

• The SAFE MLO Test consists of:– The National Test Component– Unique State Test Components (one for each

state or agency)• All state-licensed MLOs must take and pass the

National Test Component• MLOs must take and pass the State Component for

each state* in which they seek licensure (*except those included in certification process)



Test Design and Construction

• National Test Component– 100 questions = (90 scored +10 unscored)– 180 minutes for appt; 150 minutes for testing

• State Test Components– 55-65 questions = (45-55 scored +10 unscored)– 120 minutes for appt; 90 minutes for testing

• Passing score = 75%– National Component = 68 correct answers– State Components = 34 – 42 correct answers



States with Early Test Deadlines

The following three states each have testing and education deadlines of December 31, 2009• New Hampshire• Pennsylvania• Rhode Island



Preparing to Take the Test



MLO Testing Handbook

Everything you need to know about testing



Live Links

• http://mortgage.nationwidelicensingsystem.org/Pages/default.aspx

• Go to Popular Links (Right hand side)

• Testing (Professional Requirements) – Select 24 Page MLO Testing Handbook



Content Outlines



Content Outlines

• Each test has its own outline– national component

– all state specific components

• Outlines provide: • specific test contents

and

• question distribution (weightings)



Content Outlines

content outlines



Here’s what they look like…

Live Link: National

Live Link: Vermont



And we should also mention…

• Content outlines are an overview of what will be on the test.

• They can be utilized as a study tool for test takers.

No additional study guides or study materials will be developed

or endorsed by NMLS.



Federal Mortgage Law

• VMBA Links OnLine www.Vermontmba.org

• Next Slide and posted on our News & Links page and our Education page

– Not An Official Source!

Helping Each Other• Audience – any others to share?



VMBA Federal Law Links

• RESPA http://www.vermontmba.org/files/MBA_Key_Points_in_RESPA_Rule_11-14-08.pdf http://www.hud.gov/offices/hsg/ramh/res/respa_hm.cfm

• Equal Credit Opportunity Act – Reg B http://www.federalreserve.gov/boarddocs/supmanual/cch/200601/fair_lend_reg_b.pdf

• Truth-in-Lending Act – Reg Z & HOEPA http://www.thefederalregister.com/d.p/2009-08-12-E9-19254

• SAFE Act http://www.hud.gov/offices/hsg/ramh/safe/smlicact.cfm• HMDA Home Mortgage Disclosure Act http://www.ffiec.gov/hmda/• Fair Credit Reporting Act http://www.ftc.gov/os/statutes/031224fcra.pdf• Privacy Protection/Do Not Call

http://www.fcc.gov/cgb/policy/TCPA-Rules.pdf• FTC Red Flag Rules (FACTA)

http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm• Gramm-Leach-Bliley Act http://

www.ftc.gov/privacy/privacyinitiatives/glbact.html



Vermont Mortgage Law Links

• Vermont Statutes Annotated Title 8, Chapter 73, Licensed Lenders ActTitle 8, Chapter 200, Consumer ProtectionTitle 9, Chapter 4, Interest

• Banking Division RegulationsB-82-1 (Revised) HearingsB-96-1 Mortgage BrokersB-98-1 Commitment LettersB-98-2 High Rate, High Point NoticeB-2001-01 Financial Privacy



Vermont Mortgage Law Links

• Banking Division BulletinsB-7 Loans vs. CommitmentsB-11 Charges on Subordinate Lien MortgagesB-17 (Revised) Home Loan Escrow AccountsB-19 Permitted Charges on MortgagesB-24 Funded SettlementsB-26 Mortgage IssuesB-27 Mobile Home Contract DisclosuresB-29 Guidance on Non-traditional Mortgage ProductsB-31 Property InsuranceB-32 Statement on Sub-prime Mortgage Lending



Enrolling: Step-by-Step Instructions



Test Enrollment Basics

• A candidate does not have to complete education prior to enrolling or taking a test.

• Before enrolling, a candidate must have a unique NMLS ID number (must either already have made a filing or created a base record).

• A candidate must request and pay for an enrollment in NMLS before scheduling a test session (*enrollment fees are non-refundable– listed on testing page).

• Each enrollment window is open for 180 days, during which the candidate must schedule to take the test.



Test Enrollment Fees

• The National Test Component: $92

• Each State Test Component: $69



“After candidates create enrollments, how do they schedule test appointments?”



Next Step: Scheduling a Test



Basics of Test Scheduling

• To schedule, must have an NMLS ID number

• 500 test centers for candidates to choose from (Pearson and Prometric) TWO Centers in VT –

Pearson Professional Centers Prometric Testing Center

30 Kimball Avenue Suite 202 600 Blair Park Road, Suite 326South Burlington, VT Williston, VT

802-657-3535 802-872-0251

• OK to use NH, MA, NY sites – closest to YOU

• Scheduling– online or over the phone



Basics of Test Scheduling– More Info

• All tests are available at all test centers (i.e. candidate may take AZ test component in PA)

• A company can request a group appointment (see Prometric or Pearson web sites for more info)

*Special accommodations requests may also be made if

necessary.



The Test Center



Entering the Test Center

• Arrive 30 minutes prior to test time• Must bring a current, government-issued ID with candidate’s

photo and signature.• Will be photographed; finger or palm print may be taken• Candidate may not bring anything into testing room (may be

asked to show empty pockets) • All belongings such as notes, cell phones, watches, wallets

must be placed in locker • Basic calculator (not financial calculator) and scratch paper

are provided• Must read and agree to the Rules of Conduct (Next Slide)



Test Rules of Conduct*

• Prohibition Against Assistance or the Use of Study Materials• The purpose of this form is to make sure that you understand and acknowledge• the rules of conduct you must follow in completing this session. You must• read and agree to this before you will be permitted to start your session.• I understand that:• 1. I am attesting that I am the person I represent to be for this session.• 2. I must not take any personal items such as notes, formulas, study materials, or • electronic devices into the testing room. I will place all personal belongings in • the locker provided by the testing vendor prior to entering the testing room. • 3. I must not receive any form of assistance during the test or restroom breaks. • 4. I must not give any form of assistance during the test or restroom breaks.• 5. I am not permitted to use a telephone, cellular phone, pager, hand held• computer or other communication device, electronic or otherwise, during • the test or during restroom breaks.• 6. During restroom breaks, I must not leave the premises and may go only• to the restroom.• 7. I must not remove any written, printed, or recorded materials from the• test center other than the score report provided by the center staff. • The test materials remain the property of NMLS and/or• developing organization(s), and I shall maintain the confidentiality• of the materials, including the questions and my answers to them.• 8. If I violate any of these rules, I will be advised of the violation and the test center representatives will report the violation to

NMLS. I UNDERSTAND THAT NMLS MAY REPORT THE VIOLATION TO THE STATE(S) IN WHICH I AM SEEKING LICENSURE AND THE VIOLATION MAY SUBJECT ME TO DISCIPLINARY ACTION BY THE STATE(S), INCLUDING DENIAL OR REVOCATION OF MY LICENSE(S).

• *Subject to change



Completing the Test: Score Reports

At the end of the test session, candidates will:• see their test scores on their computer screens• receive a paper copy of their score report

These scores do not become official until they are entered in NMLS.

Within 48 hours of completing a test, candidates will receive an email informing them that their official scores are now ready to be viewed in NMLS.



“What happens if a candidate fails?”

The pass rate for the National Component of the test as of October 31, 2009 was 71%



Retake Policy



Retake Policy

• Must wait 30 days between each test taking attempt

• May create an enrollment and schedule an appointment, but can’t take the test prior to the end of prescribed wait time

• After every fourth failed attempt, a 180 day wait time is instituted

*After passing a test component, a test taker will not be allowed to retake that particular test component.



Testing Summary

• Get your NMLS ID Number

• Take the National Component ASAP

• Take the State Component(s) when available



Education Requirements

• State Licensed MLOs must complete:– 20 hours of pre-licensure education– (once licensed, 8 hours of continuing education)

• The courses must be approved by NMLS

• CE is not required in the year in which PE requirements have been completed.



Education Subject Requirements - PE

Pre-Licensure

Education• 3 hrs Federal• 3 hrs Ethics• 2 hrs Non-trad,

consumer protection• 12 hrs Elective• 20 hrs Total

States may require more than 20 hrs and/or require state content be included in the Elective hours

Vermont imposed NO Specific Educational requirements above the 20 Hours



Education Subject Requirements - CE

Continuing Education

• 3 hrs Federal• 2 hrs Ethics• 2 hrs Non-trad,

consumer protection• 1 hrs Elective• 8 hrs Total

States may require more than 8 hrs and/or require state content be included in the Elective hours

Vermont imposed NO Specific Educational requirements above the 8 Hours



Certification

Certification is a process by which states/agencies may recognize or “certify” the education completed or the state tests passed by an MLO, which will allow that MLO to satisfy the Pre-licensure education requirement or the state test component of the SAFE Act. NOT APPLICABLE FOR VT



Education Course Formats

Pre-Licensure

Education Formats• Classroom• Classroom equivalent• Instructor-led online

Continuing

Education Formats• Classroom• Classroom equivalent• Instructor-led online• Self-paced online



Education Availability

Courses are available from 120 NMLS Approved Course Providers

Currently there are 166 approved PE courses



VMBA – An Approved Provider

Associations – NMLS Approved Course Providers

1. Alabama MBA

2. Connecticut MBA

3. Florida AMB

4. Michigan Assoc of MP

5. Mortgage Bankers Assoc

6. NAMB

7. Mortgage Ed Foundation (IL)

8. NE Mort Education Council

9. New York Assoc of MB

10. North Carolina Assoc of MP

11. Rhode Island MBA

12. Texas MBA

13. Vermont MBA



VMBA Approved Courses

• 3 Hour Federal Law – RESPA (offered 9/9)• 4 Hr Non-Traditional – Reverse Mtg (10/13)• 4 Hr Elective – VT Mtg Law 101 (10/13)• 4 Hr Ethics – FHA/Fair Lending/Fair Credit (11/4)

• Plans for next 3 – 4 months:– Reoffer Reverse Mtg, VT Mtg Law, Ethics– New classes – Electives – Self-Employed, Appraisal, Credit Reports,

Closing issues– Look for Federal Law program



Tips and Reminders

• To pass the test, a candidate must achieve a score of at least 75%.

• Review the Content Outlines

• Study!

• Review sample questions and information at the NMLS Resource section of their website

Don’t Delay too long! Good Luck!



Questions about Testing or Education

Documents

State Regulatory Registry LLC a CSBS company NMLS Testing & Education SAFE Mortgage Loan Originator Professional Requirements VMBA Presentation November/December