The process of getting an NMLS license begins with understanding that there is no such thing as an NMLS license! “NMLS” stands for the Nationwide Mortgage Licensing System which is an entity created and jointly operated by the Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR). The NMLS is simply a system for overseeing and, in cases where a license is required, tracking the licensing of residential mortgage loan originators (MLOs) operating throughout the United States and its possessions along with the companies sponsoring them. In this article, I plan to outline how to get a mortgage license.
All individuals wishing to originate federally-related mortgage loans (residential mortgage loans securing one-to-four-family residential dwellings used for primary residential, secondary residential, or investment purposes) must, at the very least, be registered through the NMLS. If a mortgage loan originator ultimately works for an exempt entity (a depository institution regulated by a federal banking regulator or the Farm Credit Administration (FCA)), he or she is considered to be exempt from licensure and this is as far as that individual must go. If, however, the individual desires to seek sponsorship (employment) with a non-depository (non-exempt) lender, then he or she is not exempt and must secure a Mortgage Loan Originator license to be able to do so.
MLO licenses are issued by each state or U.S. possession. For a non-exempt mortgage loan originator to originate federally-related mortgage loans on properties located within a particular state or U.S. possession, he or she must possess a valid MLO license, issued by that state or U.S. possession. For example, if a non-exempt MLO resides in Connecticut, is sponsored by a non-exempt lender located in Idaho, and desires to originate a federally-related mortgage loan securing a property located in South Carolina, then he or she must be licensed as an MLO by the State of South Carolina in order to originate that mortgage.
The following seven steps will guide you, step-by-step, to getting your MLO license.
Step 1 – Create Your NMLS Account! – It’s Free!
Before doing anything else, the prospective residential mortgage loan originator needs to create their free NMLS account through the Nationwide Mortgage Licensing System’s website. To do so, simply visit the NMLS’ website, click on the “Log in to NMLS” button at the top right corner, click on the “Request an Account” link, and select the “Individual” option.
Once the loan originator candidate has provided all of the required information, his or her NMLS account will be created and he or she will be assigned his or her NMLS number (aka unique identifier). The unique identifier connects the future MLO to everything that he or she will do during his or her mortgage career. All mortgage origination professionals must register through the NMLS.
If your intention is to originate mortgages for an exempt entity, this is as far as you need to go since you will not be required to secure your MLO license. If you’re an individual for whom a license is ultimately required, please continue.
Critical Note: Any individual not intending to pursue mortgage loan origination but who, instead, intends to operate as a contract (1099) processor or underwriter must also be licensed as a residential mortgage loan originator through each state or U.S. possession in which the properties on which he or she ultimately processes or underwrites are located.
Step 2 – Complete Your 20-hour Pre-Licensing (PE) Course
All candidates for mortgage loan originator licensure must successfully complete an NMLS-approved, 20-hour pre-licensing education (PE) course. We strongly recommend that you register for and complete your 20-hour course through OnlineEd (NMLS #1400327), the premier NMLS-approved education provider (save 10% off of the already-low registration fee by using coupon code success10 when registering).
Step 3 – Study for the NMLS National Mortgage Licensing Exam
All residential mortgage loan originator licensing candidates must take and pass a 120-question, multiple choice national mortgage licensing examination in order to qualify for licensure. Although the 20-hour PE course will help prepare you, no 20-hour course, by itself, can effectively prepare anyone for this exam. To pass this exam, the exam candidate must master the four strategies for NMLS exam success:
3. Proficiency; and
AxSellerated Development offers numerous NMLS exam preparation courses, products, and services to help prepare you for success. View those here.
Step 4 – Take and Pass the NMLS Exam
You may take your NMLS national mortgage licensing exam at one of Prometric’s numerous testing centers located throughout the United States and its possessions or online from the comfort of your own home. Regardless of which modality you choose, be certain to thoroughly read everything you’re sent in response to your exam registration.
Before you’re permitted to schedule your NMLS exam, you will be required to pay for it and accept the NMLS’ Candidate Agreement. To do this:
1. Log into your NMLS account;
2. Click on the “MLO Testing & Education” tab;
3. Click on the “Create New Test Enrollment Window” link;
4. Click on “National Test with Uniform State Content”;
5. Select the “SAFE Mortgage Loan Originator Test – National Component”;
6. Click the “Add to Cart” link;
7. Click the “Proceed to Candidate Agreement” button;
8. Review the Candidate Agreement and click the “I Accept” button; and
9. Click the “Pay Invoice” button to pay the $110 exam registration fee.
Once you’ve completed these steps, you may schedule your exam by:
1. Logging into your NMLS account;
2. Clicking the “MLO Testing and Education” tab;
3. Clicking the “Manage Test Appointments” link on the submenu;
4. Clicking either the “Schedule – Test Center” or the “Schedule – Online Test” button; and
5. Complete your registration by following Prometric’s prompts.
You will have slightly over three hours to complete your exam and you must score a grade of 75% or higher to achieve a passing grade.
Step 5 – Complete All Required NMLS State-Specific Pre-Licensing (PE) Education (if applicable)
As previously discussed, Mortgage Loan Originators who are not exempt from licensure must be licensed through each state or U.S. possession in which the properties on which they desire to originate residential mortgage loans are located. Some states require MLO licensing candidates to complete NMLS-approved state-specific pre-licensing education, in addition to the 20-hour national pre-licensing course, in order to apply for and ultimately be issued their state’s MLO license.
Visit the NMLS’ State-Specific Requirements page to determine if the state(s) in which you ultimately desire MLO licensure require additional state-specific pre-licensing education. If they do, we strongly recommend that you register for and complete your state-specific PE courses through OnlineEd (NMLS #1400327), the premier NMLS-approved education provider (save 10% off of the already-low registration fee by using coupon code success10 when registering).
Since the NMLS national licensing exam does not contain state-specific questions and since there are no state-specific exams that you will be required to take and pass, we strongly recommend that you reserve completing all state-specific pre-licensing education until after passing the NMLS national exam. Doing so will afford you the opportunity to more thoroughly focus on the national test material while preparing for the national exam. You may, however, register for the 20-hour course along with any required state-specific courses simultaneously through OnlineEd (NMLS #1400327), the premier NMLS-approved education provider (save 10% off of the already-low registration fee by using coupon code success10 when registering).
Step 6 – Find a Sponsor
Finding a sponsor simply means securing employment through a licensed mortgage lender or broker. Take your time and explore your options. The keys to finding the ideal sponsor are creativity and flexibility. The more creative and flexible you are, the easier it will be to locate an employer willing to take a chance on you.
The number one piece of advice that we can offer you when seeking sponsorship is to find a sponsor that provides a formal and thorough training and mentorship program. Any potential employer that does not offer a thorough training program, a part of which includes the opportunity to shadow an experienced MLO, is an employer who you should not consider. Could you imagine a police officer graduating from the police academy and being directed to patrol solo on his or her first day? That would prove disastrous! Just as the rookie police officer requires extensive in-the-field training, so does the rookie loan originator.
Although you will not be allowed to originate loans for your new sponsor until you are issued your license, in order to be issued an active license you will first need to be actively sponsored.
Step 7 – Apply for Your License
Once you’ve successfully completed all of the aforementioned prerequisites and secured sponsorship, the time has arrived for you to apply for your MLO license. All state license applications are submitted through the NMLS’ website.
To complete the license application process, visit the NMLS’ State Licensing page, select the state or U.S. possession from which you seek licensure, scroll down to the bottom of that page and look for the requirements checklist and application form for the Individual Mortgage Loan Originator License on the right. Be absolutely meticulous when following all directions and procedures to ensure as smooth a licensing application process as possible.
In general, if your MLO license is issued between November 1st and December 31st, it will be valid through December 31st of the following year. If it is issued prior to November 1st, however, your license will most likely expire on December 31st of that year. To continue originating mortgage loans, licensed mortgage loan originators are required to renew their licenses annually by:
1. Completing an annual 8-hour NMLS-approved continuing education course;
2. Completing any NMLS-approved state-specific continuing education required by the state(s) in which the licensee is licensed; and
3. Applying for renewal which includes remitting the annual license renewal fee.
Any state-licensed mortgage loan originator who has neglected to renew his or her MLO license by the close of business on December 31st must cease and desist from all mortgage loan origination activities that would otherwise require licensure until an active MLO license has once again been secured.
All NMLS-approved national and state-specific continuing education courses may be obtained through OnlineEd (NMLS #1400327), the premier NMLS-approved education provider (save 10% off of the already-low registration fee by using coupon code success10 when registering).
Please feel free to reach out to us with any questions that you might have via www.nmlstraining.com. We’re always happy to hear from and assist new and aspiring mortgage professionals achieve success. Good luck!