Dave Evangelisti By: Dave Evangelisti
NMLS Practice Test

Looking to enter the real estate world and want to become a mortgage loan officer? You will need to take the Nationwide Multistate Licensing System and Registry (NMLS) test.

The best way to prepare yourself for this exam is to take an NMLS practice test.

Sometimes referred to as an MLO practice test, any kind of NMLS practice test can help you become familiar with the questions you will see on the exam and tell you what items you need to study more to become a better test-taker and improve your chances of succeeding on the NMLS exam.

Summary: Prepare for your mortgage test with the resources listed below.

Finding a good practice test that you can use from anywhere on your own can be a difficult task to accomplish. 

Our team of experts has found some resources for you to use. Use the NMLS test prep resources below.

Our team understands that you may be looking for a quick and easy study by choosing this article, so we have decided to include a few sample questions for you to look at while you have a moment or two to study. 

1. What law was passed by Congress in 1977 to help combat redlining?

  1. Homeowner Protection Act (HPA)
  2. Equal Credit Opportunity Act (ECOA)
  3. Fair Credit Reporting Act (FCRA)
  4. Community Reinvestment Act (CRA)

D: Community Reinvestment Act (CRA)

2. Which of the following must a loan processor or underwriter never represent to the public?

  1. Their level of competence
  2. That they perform any activities of MLO
  3. Their honesty
  4. That they have various professional training

B: That they perform any activities of MLO

3. When referring to immediate family members, the model of state law refers to all of the following except:

  1. Spouses
  2. Parents
  3. In-Laws
  4. Children

C: In-Laws

4. Regarding MLO compensation, which of the following is prohibited under the final rule of the TILA?

  1. Dual compensation
  2. Loan volume
  3. Long-term loan performance
  4. “Pull-through” rate for compensation

D: Dual compensation

In July 2008, the United States president signed the Housing and Economic Recovery Act of 2008. This was enacted to help reduce fraud and help home buyers know that they were being advised by the right people. It required all Mortgage Loan Originators to be licensed and registered with their state.

Anyone wishing to join the mortgage loan industry must take the NMLS exam and register their MLO abilities with their state government. Without this licensing, the person cannot give out or do any work with a mortgage loan.

The NMLS test is comprised of 120 questions, of which 115 are scored questions, that the test-taker has 190 minutes to complete. 

This means that you have approximately a minute and a half to answer every question on the exam.

You will not know which questions are scored and which are unscored, so you will need to be diligent and answer every question to the best of your abilities if you are to succeed on the NMLS test. To pass, you will need to score 75% or better.

There are many topics covered on the NMLS exam, so your studying will need to be long and thorough if you want to pass the exam. 

Here are the topics you can expect to see on the exam and how frequently they will occur:

  1. Federal Mortgage-Related Laws (24%)
    1. Real Estate Settlement Procedures Act (RESPA)
    2. Equal Credit Opportunity Act (ECOA)
    3. Truth in Lending Act (TILA)
    4. TILA-RESPA Integrated Disclosure rule (TRID) (“Know before you owe”)
    5. 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. Federal Trade Commission Red Flag rules
      4. Bank Secrecy Act (BSA)/Anti-Money Laundering (AML)
      5. Gramm-Leach-Bliley Act (GLBA)
      6. Mortgage Acts and Practices
      7. Electronic Signatures in Global and National Commerce Act (E-Sign Act)
      8. USA PATRIOT Act 
      9. Homeowners’ Protection Act (Private Mortgage Insurance (PMI) Cancellation Act)
      10. Dodd-Frank Act
    6. Regulatory Authority
      1. Consumer Financial Protection Bureau (CFPB)
      2. Department of Housing and Urban Development 
  2. Uniform State Content (11%)
    1. SAFE Act and CSBS/AARMR Model State Law
  3. General Mortgage Knowledge (20%)
    1. Qualified and Non-Qualified Mortgage Programs
    2. Mortgage Loan Products
    3. Terms Used in the Mortgage Industry
  4. Mortgage Loan Origination Activities (27%)
    1. Loan Inquiry and Application Process Requirements
    2. Qualification: Processing and Underwriting
    3. Closing
    4. Financial Calculations Used in Mortgage Lending
  5. Ethics (18%)
    1. Ethical Issues
    2. Ethical Behavior Related to Loan Origination Activities

You can view a more in-depth guide to these topics here to learn more about what specific details you need to study. 

But, as you can see, there are numerous topics covered on the exam and you won’t know which specific laws and practices you will be asked about from each topic. This makes it very important to use a loan officer practice test when preparing for this exam.

As you may have noticed during your own research or from reading this article, there are a few different terms used to describe the same test. It depends on the source you are getting the information from. 

NMLS stands for Nationwide Mortgage Licensing System and Registry. This is the organization that was created in 2008 to make all mortgage loan originators register with to ensure safe mortgage loans are being handed out to clients.

MLO stands for Mortgage Loan Originator. This is the official term used to describe someone who has received licensing to hand out mortgage loans. 

SAFE stands for Secure and Fair Enforcement for Mortgage Licensing. This is most often used with either MLO or NMLS. This was an act put into place to help housing consumers to trust people who are mortgage loan originators.

That being said, all of them are the same exam and just referred to differently.

How many questions are on the NMLS test?

There are 120 questions on the NMLS test with 115 of them being scored questions and 5 being unscored. Test-takers have 190 minutes to complete the exam.

How do I pass the NMLS exam?

Passing the NMLS exam takes plenty of studying and preparation. Test-takers must score 75% or better to pass.

Do I need to take the NMLS exam to be a loan officer?

You only need to take the NMLS if you want to become a mortgage loan officer.

Is the NMLS exam the same as the MLO exam?

The abbreviations mean different things, but they will both cover the same topics which pertain to becoming a Mortgage Loan Originator.