New National LO Exam Pass Rate 69%

The pass rate of the new national LO exam is 69%.  Between July 30, 2009 and November 30, 2009:
10,421 national exams were taken and 7,219 passed the exam. The report PDF is available here.

This means the new national exam is too easy, like I surmised back in June.  Or is it?

What would be more helpful to see in future reports from the NMLS is the number of years experience of the test candidates.  For example, if the LOs who took the new national exam during this first reporting period had 5 to 10 years of experience originating loans, then a 69% pass rate is actually quite dismal, especially since many states have enacted mandatory testing and education over the past few years.  I’d expect it to be higher based on the easy sample test questions NMLS gives us in the candidate handbook. 

10,000 exams taken seems high to me, given the number of LOs who have left the industry.  But divide 50 states by 10,000 and I can easily see 200 people in each state needing to pass that test. If the candidates who took the test were newer to mortgage lending, then a 69% pass rate seems too high.

97 thoughts on “New National LO Exam Pass Rate 69%”

  1. Hi cd,

    The reason the test doesn’t show you the answers so you can learn is because the National LO test is not a learning tool but an assessment tool.

    The learning part is suppose to be done before you get into the testing center. What you’re describing sounds like something you’d purchase from an exam prep course.

    There is no scam regarding the 10 unscored questions. Those are just sample questions so the system can gather data on the LOs.

    The wording sounds odd to practitioners because the words are copy/paste right from the laws and statutes. We’re not use to reading the federal register or the federal laws when we need an answer on RESPA or TILA. Instead we ask our compliance person.

    That’s why the language sounds odd.

    There is no conspiracy theory.

  2. even if you take a driver licence test, DMV offers some informations for the test. if we do not learn from the previous failed test, we will keep failed. i do not think that is what the nmls wants. please offer the study materials. i do not want to waste more money for the retake test.

  3. Hello everyone:

    I stumbled upon this website and have enjoyed the comments. I am new to the profession… or trying to be I should say. I was offered a job back in the fall by a local mortgage lender after having spent 15 years in the medical field. I consider myself, and have been told that I have above average intelligence. I am college educated, graduted with a 3.8, never failed a test in my life. Having said all that, I have taken the NMLS test twice scoring 74 and 73 respectively. In my opinion, the questions are framed in a way to intentionally cause confusion. I did take a 20-hour SAFE course and am going to retake it before taking the test again. It is very frustrating. Any feedback would be appreciated. Oh, I passed my state exam with an 86.

  4. If it’s any consolation, I have been in the business 15+ years originating and management. I studied both the Fed and State material bought from different schools. I studied day and night for at least a month before taking both tests within a week of each other. I scored a 78 on the Fed and an 88 on the State. Don’t listen to people who passed say the tests are so easy and they didn’t need to study. The tests are very ambiguous and many of the questions seem as though there could be more than one correct answer. Then again, there are questions that seem to be freebies in that they are easy to answer. With that said, I would say read all the material and then study not only what has been read but also as many questions and answers from as many sources as possible. That’s what I did and I believe it helped me. Good luck.

  5. I too was thrilled to see this board talking about this pathetic National component Mortgage test. It is rigged and its all about getting the right test. I have taken it Three times. First I got a 69% second was a 73% and finally I scored an 80% and passed the dam thing. I too am college educated , prep schools and consider myself as smarter than the average bear but my goodness is this test rigged. I wanted to see which questions I got wrong but that is the mystery. Why is it so secretive. I want to see answers and yes I think we as Mortage Bankers and Brokers should sue this pathetic testing system. It is incredibly unfair. I am telling you those first two tests were full of questions that were very difficult and I found myself just quessing through them. Curiously, the first two times I took it, I was given a #2 pencil & paper and a calculator. This last time I was given Two marker pens that you write on this plastic board and a fat chalkboard erasers. What was the reason that I could not use a pencil? Who the hell knows…

    WE have all been through the ringer this past year with all these ridiclous changes. I think it was a joke that we had to submit to this national background check , fingerprinted like a criminal and told that we are criminals in so many potential questions within this test.

    Major problem with the test is the language. The English is horrible and the questions are ambigous. Yes there were Two correct answers to questions and its tricky and the test wants you to fail. bottomline. They, the Banking system in America, want us gone from the planet so that they can control it all. We are constantly being maligned in the media and I am so fucking sick of it!

    Hint: Spend less time studing the math as there is very little to figure out, just simple calculations really. Good luck to everyone! .. and Happy New Year!

    besides the compucram by Hondros, pick up their Mortgage Loan Originator Review Crammer book. Its a 168 page soft shell book that worked for me .. finally!

  7. Hello Everyone,

    I am so frustrated! I can not seem to pass the National Exam. I have failed 3 times, first time I scored a 73%, second time, 70% and last week, a 73% once again. I feel like I am missing something. I have studied and studied. This next test will be my 4th try and can someone please help me pass this test?? I have score in the 90% range when I take all the exam prep tests. I do not know what I’m doing wrong? I will aprreciate any advice! Thank you in advance! :-))

  8. I do have some advice here; look at your scoring results from the test and see where it was the lowest; each part of the test is broken down into sections such as ethics, loan originator activities, etc. If it’s the same low percentage in the same section each time then that’s where you are the weakest and should concentrate extra study time. This would be your first step. If it’s low in one section on one test and then low in another section on a subsequent test then you need to rethink your study habits. I would suggest to take your time and take a class study where others are present and can bring up questions that can be answered and then perhaps the material will be better comprehended. Don’t be in a rush; go slow and make sure you understand all of the material. I think after 4 times you will need to wait 6 months for a retake. Good luck.

  11. I am trying to repeal this NMLS SAFE NATIONAL TEST in Florida.
    It will not stop preditory lending. I feel it may be un-constutitional. Also if they can take a license away with no revocations, then we will be subjected to all other lic to be taken from us. Lets Stop NMLS National Test we must all work together calling your legislatures. It may be against BILL OF RIGHTS. Call Washington and stop blaming Mortgage Brokers that have their license in Good Standings.RENEWAL OF ALL GOOD STANDING LICENSE.
    Go after Predatory Lenders Not US!!!

  12. Chris, there will be no repeal in Florida because….the SAFE Act is a national law, not a state law.

    There’s nothing unconstitutional about the SAFE Act.

    The test sets a bar. The test is a barrier to entry. If a person cannot pass the LO exam, there are many other things that person can do instead of just blaming the government. I wrote a blog post about this…let me go find it for you. Here you go

    https://mortgagefiduciaries.com/2010/12/why-some-los-are-not-passing-the-national-lo-exam/

  13. If you have read the safe act of 2008. you see that this test is nothing more then covering their backs on the predatory loan industry, fannie and freddie.

    let’s wake up.. it’s not us that caused this melt down. we are just the bottom of the food change.

    if we let them get away with this safe act. don’t be suprised if you have your drivers license is next..

  14. Hi Chris,

    Continuing to blame others for the meltdown is pretty naive at this point.

    There WAS problems within the loan originator community. Somebody was sitting across the table from the consumer selling them a worse-off loan than they could have received.

    The banks will always come out with products designed to make the banks more money. They will do this again and again.

    The SAFE ACT was needed. Licensing creates a minimum barrier to entry. Heck you don’t even need a H.S. diploma to become an LO….helping people with the largest financial decision of their life. That in itself is a crime. So the test “is” the h.s. diploma “test.”

    If a person can’t pass the test after taking the test over and over again, maybe it’s time to think about another job.

  15. I read all the comments on this site which I appreciate. I myself is a college graduate with a 3.0 GPA years ago (by the way, English is not my native language) with average intelligence. I am new to the industry. I spent four full days reading the 300-page reading material from the tow-day live cram course, and spent three more days on the online test drills. I passed the NMLS exam on my first try with 81%. Here is how I did it. The instructor said that in order to pass the exam, all online cram tests need to be scored at 90% or above. I did about (at the minimum) 1,500 questions and scored between 90% to 100% on all the tests. Hope it helps.

  16. Congratulations, Steve! You’re making my point exactly. It’s all about the time spent studying. English language learners know this and accept it and STUDY….and then they will pass.

  17. Just took the state portion of the exam and failed. I scored a 70%. I have prior knowledge. I studied all the information given to me and I studied for a week. I knew all the stats and terms including laws. However, the test may have covered about 20 percent of what I studied. There were terms and information that was not included in my books. Does anyone know a realiable source. I am planning to take National in a couple of weeks.

  20. The NMLS publishes a state and federal exam study guide for LOs. Find the California study guide. In there, it will tell you exactly which California laws to read in order to pass the California exam.

    Have you taken your 20 Hr SAFE LO Prelicensing class yet? Typically your course provider will be able to give you lots of sample test questions at both the state and federal level as part of your course.

  21. I did complete my 20 hours and I was given several practice test. I scored above 90 on all of them. The material given to me had the breakdown of the test. I was totally confident before taking the test. However that changed when there were questions on material that was not listed in my books. Came out totally discouraged. I will check the nmls site. I appreciate your feedback and quick response.

  22. Okay. I wrote a long blog post about why people are/are not passing the exam.

    Getting a high score on a course provider’s practice exams is meaningless. There is no course provider that can give you practice exams that match exactly what’s going to be on the test.

    if it were that simple, why bother with all this? Let’s just give everyone a license. The exam requires more studying.

    See numbers 4 and 10 from this list:
    https://mortgagefiduciaries.com/2010/12/why-some-los-are-not-passing-the-national-lo-exam/

  24. You bet. If you have trouble finding the state and federal study guides, I think I linked to them in that “who is/is not passing the exam” blog post.

  25. WOW – I don’t feel so bad after all. Nancy – I agree with you completely. I worked for a Mortgage Company as a processor for two years 2006-2008. I have a college degree, I was on the deans list in college, and test very well. I’ve been out of college for a year. I was offered a job back at the mortgage company- I have been working as a Sales Assistant – working to become licensed as an LO. I passed the State Component with an 84 – I studied my Senior LO’s paperwork. As for the National – I took the 20hr pre education class, I have studied day in and day out. I have taken test on all websites, I have purchased extra material online, I have purchased tests online, I have been working with an LO to get the feel of things. AND I HAVE FAILED THE NATIONAL TEST TWICE!! I hate feeling so down, I am going to do what ever it takes – but -WOW. 74 on the first one and 71 on the second test. The questions I thought I had it……I answered 90% with confidence that I had the right answer…..only to find out I didn’t. This blog is great and I intent to look at all the information and pages given…..but I hate feeling like there is nothing more I can study…..any advice you may have I would greatly appreciate! Thank you.

  26. My CA & Nat test is next Thursday! I’m not sure if I’m ready to take the test. I just started studying this past week. I’m scoring over 90%, I just feel like I need extra study material. I have my RE license and I fell like this test is much harder. Any one hv any advice? I have to pass this test the first time. It’s urgent due to my job situation! I would appreciate the advice. Thank you!

  27. I just got home from taking the National Nmls test a sexond time. The first time I made a 74
    today I made a 74. Yes 1 point from passing. I was told in my 20 hour class by a student not to go to Lakeforrest, ca to fake the test because most failed to go anywhere else outside of Orange County. I didnt take her advice. On my first test I had 12 to 15 questions on how long you would go to jail for. ertain offences that we NEVER studied. This time very squirley mixed up versions of what was most likely or possible or something. Very vague. I asked the test administrator what was up since I was one away again. We discussed the 10 or so points that they wont divulge and also wont devulge which ones are right or wrong. I asked if any other tests they administer were like this and two of them said no. She said one woman has made a 74 four times. That it was common. She also said that its much harder than last year in 2011. Every year its harder. She suggested it was strange and to complain to fhe NMLS. I said right!!!!! She said its the only test they dont get to know whats counted and the answers to. Weird… It doesnt seem fair. I was the outstanding graduate in my class at The University of Houston, An accepted student at Oxford in England and a Deans list regular… Also nominated for Whos Who in Colleges and Universities. I made 100% on my real esfate exam and they called me be ause I was the only one to do so that the state of CA could remember. The test is BS and they are keeping good people from passing. Someone should at least investigate this. I will try again and and will reapect the system but question it!!!!! Any suggestions as to tests online to study other than a prep I took twice in. Anaheim , ca and the 20 hrs please let me know. Is there a better crash. course in so california???? Thanks and good luck!!!!

  29. Here’s the kicker; you don’t need to pass the test if you work as an employee (loan officer) in a bank. You still have to register with NMLS, but no test. I think there is a method to the madness here.

  30. I passed the test on the first time….not an extremely high score (78), but it was a pass. This is what i did, and I hope it helps people like me who want guidence on how to pass. First off, I have no mortgage experience, so just learning the material is important, let alone studying it! I used TrainingPro for the 20 hour course completion. After reading a section for the FIRST TIME I was scoring very high…first red flag that the questions were to assess basic knowledge. After that I printed all reading material and wore out my highlighter. My employer also bought me extra questions from TrainingPro, (I think they were like 5 or 600 questions)..VERY helpful..Highly recommend purchasing them! The main thing is studying…I had 12 days to learn, study and pass the exam. (I gave up memorial day weekend in wonderful northern michigan)..You really have to want it to pass it. I am not the smartest (graduated with a business degree with a 2.8 gpa) and typically not a good test taker. Its all about focus and commitment to studying. One tip is that the calculations are basic…BUT make sure you read what they are asking for…take your time on the easiest calculations to verify what they want. I used my dry erase board to write down key words like not and except to rearrange the question so that it made better sense to me. Hopefully this helps as I know it can be a very stressful process……….also go to sleep very early on eve before test because you probably wont ACTUALLY be able to fall asleep until hours later!

  33. Thanks for letting me know. But those questions are in Financial Mortgage Strategies?
    Questions like

    Which is NOT a triggering term according to TILA, requiring additional disclosing in advertising?
    A. “360 easy payments”
    B. “$3,000 down”
    C. “Pay only $800 a month”
    D. “Terms to fit every budget”

    What is the fee threshold set by the Federal Reserve Board that triggers HOEPA disclosures?
    A. 5%
    B. 7%
    C. 8%
    D. 10%

    Which law requires lenders to make full disclosure about APR to borrowers in real estate financial transactions?
    A. Regulation C
    B. Regulation V
    C. Regulation X
    D. Regulation Z

    A telemarketer can be fined how much per incident for calling someone registered on the National Do Not Call Registry?
    A. $5,000
    B. $10,000
    C. $16,000
    D. $20,000

  35. There is no one place to buy “books” to study for each state’s test. Instead all the study material is available FOR FREE on each state’s website.

    Each state will test LOs on their own laws governing mortgage lending.

    Find your state regulator website.
    Find the laws governing mortgage lending.
    Read the laws and any rules associated with the laws.

    The test questions will come right from the laws.
    Reading the law and rules is FREE.

    Here is an example of Washington State’s regulator website and it’s laws….all available for students to read for free. No book needed:

    http://www.dfi.wa.gov/cs/rcwswacs.htm

    Jillayne

  36. HELP! I recieved a 73% the 1st time and 68% the second. Definately MUST pass it the 3rd time. Does anyone have any tips to help me pass. Scored the worst in Mortgage Loan Origination.

  37. Wow, new to the industry and excited. Well I WAS excited…. After taking the 20 hour class, studying my ass off, buying the Compucram exams and scoring over 90% in all areas, I knew I was doomed about 20 minutes into the test. A 63% later here I sit…. I swear there were things on the test that I have NEVER heard of either in class or in the book. Total BS….. Frustrating to say the least and now you have to wait 30 days, really?

    I come from the Business opportunity industry and in that world this would be known as a HUGE SCAM.

    These are some of the question we had to answer…

    “Wait, I have to PAY to go to work”
    “Am I guaranteed to make money”
    “Is there a money back guarantee if I don’t”

    Those are the questions that my company got asked and had to answer yet the GOVT comes in and effectively shuts it down with all the new rules and regs that are IMPOSSIBLE to understand let alone follow.

    There is literally NOTHING I like anymore about this government….

  38. Hi KV,
    I’m not following the “business opportunity” stuff but I can answer the questions about the test.

    Just reading the CompuCram Q&As is a sure-fire way to fail the exam.

    Getting a high score on a course provider’s practice exams is meaningless. There is no course provider that can give you practice exams that match exactly what’s going to be on the test.

    if it were that simple, why bother with all this? Let’s just give everyone a license. The exam requires more studying.

    See numbers 4 and 10 from this list:
    https://mortgagefiduciaries.com/2010/12/why-some-los-are-not-passing-the-national-lo-exam/

    The LO licensing exam process is not a scam. It’s a barrier to entry.

    You need to do more studying.

    The number one reason why ppl fail is because they are self-reporting that they spent more time studying than they actually did.

    You need to understand how the laws interact with each other and you won’t find that kind of instruction in a bunch of practice quizzes.

  39. Andrew,
    Where are you going to work?
    Whoever plans on hiring you might have a program where they will let you come and shadow another loan originator like an intern so you can start to understand all these activities that you’re being tested on. Being able to shadow someone puts everything you’re learning in context.

  40. I’m nervous. I have a year or so experience as a processor. Took the test for the first time a month ago and failed with a 70%. I only Studies for a bout 5-6 hours. This time i’m diving in for two solid weeks because i can’t afford not to pass it this time around. I’m stll nervous. There was a LOT of math and some situations I had never encountered before on the test. Hopefully I can get through this time! I think the key is to just buckle down, outline the books (highlighted parts from class) and study that way. Uggh, I made it through college with a 3.1 gpa without ever studying, I HATE studying lol.

  41. I was offered a job as an LO and was excited to hit the ground running. I bought the Training Pro study guide for the NMLS test. On the practice tests I was in the high 80’s low 90’s.
    Then I went to take the real test and new I could be in trouble as many of the questions on the test were not in my studies. I scored a 73% and was completely embarresed having to call my future boss and telling him I failed. The worst part to me is that you dont find out what you missed, so it gives you very little to work on.
    Fortunately, today I passed on my 2nd attempt with a 75% (hey, it’s passing). Amazing the difference 1% or 2% makes.
    I noticed that many of the questions that I got on the 1st test I got again on the 2nd. The time between these tests I asked some experienced LO’s a few questions I vaguely remembered and was able to find out that a few of my answers were wrong. Fortunately, I was able to correct that the 2nd time.
    GOOD LUCK, IT CAN BE DONE

  42. If there are only 90 scored questions, am I correct in saying that you need to get 84 out of the 100 they give you to pass with a grade of 75.6?

    90 / 100 = .9 per question
    84 * 9 = 75.6 passing grade

  43. Hmmm. I guess my experience was very different from most people here. I took the course , studied moderately and passes both tests – one yesterday and the other the day before. I found the National test to be much easier. The questions were like any other – worded to make you read slowly and carefully and with the answer evident in most cases if you do. I did feel that my course and study material did not cover the state exam well. There were. Terms and rules on the test that I did not see at all in my class, my last few days of study focused predominately on the state exam material. I only got 76% on the state, 85% on the National, in 1/2 the time allotted. There are a lot of factors that go into a good test score. If we as lenders want an appropriate and well written test then we need to give feedback to the test makers – in frequency and quantity, and push for change.

    I have always thought Lenders and Realtors should have higher requirements and harder licensing. We want to call ourselves professionals but have very little in the way of a barrier to entry. It seems almost anyone can get a real estate license, I hope standards for lenders become high and self-imposed. The licensing process does seem a bit like a witch hunt right now. But, we did cause the whole mortgage melt-down/world financial crises so what should we expect? Right?…..

  44. NMLS it a rip off like many others course people fail becasue the system want to fail is just money in fact it is corruption

  45. Hi MLO, the pass rate for first time test takers is at about 69%.

    People who failed the test the first time and take it a second time…..only pass at a rate of 40%. Yikes!

    So the SAFE MOrtgage Licensing Act which directed us to create the Nationwide Mortgage Licensing System IS helping to raise the bar in the mortgage lending industry.

    It’s not that the test is too hard or that the system is rigged so “everyone” fails, it’s that it was time to ask people who are helping others with one of, if not the, biggest financial decisions in their life to be tested for competency.

    Sound like you might not have passed the test. Keep studying!

  46. I have been in the mortgage business for over 20 years. I passed the state license but failed the national 3 times. I just had the resign from work. NOT HAPPY

    Here’s the question I have… If we are required to take a 20 hour pre-licensing course by a approved provider then why doesnt NMLS endorse any of the study material? Why is it that we have to go fishing for this information? This is not right give my the information to study and I will pass. They cant give us study material endorse by an approved pre-licensing course?? WHY??? Now, I’m out of work. I have printed down everything I could and studied and I know the laws, ehtic, Activies, and the knowledge. There is something very wrong here. No one can tell me otherwise. I believe in the test! I dont believe in the fact they are not providing us with endorsed study material from approved nmls pre-licensing course providers. Even Barbara Boxer office doesnt agree with the way the test is put together. doesnt that tell you something? Let me ask you this question.. why do we bail larger companies out then they turn around a spend it on Spa treatment, golfing, and dining them self? and we are required to take the test? come on people very very wrong. Look if they gave out endorsed study material and you failed the test then well, thats on you I guess but this is on them. I am a so very very frustrated and now out of work!

  47. Hi Jamie,

    The NMLS DOES publish a list of recommended study material! It’s all right there on the NMLS Resource Center website:http://mortgage.nationwidelicensingsystem.org/profreq/testing/Pages/TestContentOutline.aspx

    Most ppl do not want to read laws. But seriously, ^that is probably the best stuff to read.

    All the 20 Hour Pre-Licensing courses are approved by the NMLS and are reviewed by course evaluators. We have to account for every minute of time spent.

    If you’ve failed three times in a row then you need to look for better study material from a different course provider. You could also go back and re-take the 20 hour course that you took initially. Sometimes people who are brand new in the industry need to repeat the class.

    You’re not out of a job. You are just out of a loan originator job. You can always apply for and get hired in mortgage lending doing other things. You can be an assistant, a loan processor or do other things for a mortgage company while you continue to study.

    Some companies have specific training classes for brand new LOs. Like a week long or month long “boot camp” where they reallllllly take the time to mentor you before you take the test.

    ALSO you could always go to work for a depository bank.

    Depository bank LOs are NOT required to pass the SAFE Mortgage Licensing exam.

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