How to Pass the NMLS Exam!

Some Good News and Some Bad News!

The Bad News

The NMLS exam’s overall failure rate has, for years, hovered right around 50%.  Yes, just about half of those who need to pass the national mortgage loan originator licensing examination are never able to do so.  And that leaves those individuals either working for an exempt entity or never being able to act in the capacity of a residential mortgage loan originator.

One of the primary reasons for why a test, the caliber of the NMLS exam, suffers from such a notably low overall pass rate, has much to do with test takers going into the exam ill prepared.  Most loan originator candidates don’t realize that completing their 20-hour pre-licensing course does not adequately prepare them for the NMLS exam.  The 20-hour course’s primary flaw is that it requires the effective delivery of approximately 150 hours’ worth of material delivered throughout a 20-hour format.  And, no matter how hard the test provider tries, there’s simply no way to effectively deliver 150 hours’ worth of content in 20 hours.

Passing the NMLS exam requires significant study and preparation beyond the 20-hour course.  And although I don’t mean to sound harsh by saying this, anyone who is not ready, willing, and able to devote the time and effort needed to properly prepare for this exam, might as well not throw their money away to take it.  Proper preparation is the only pathway to NMLS exam success.

The Good News

 The good news is that the NMLS exam is an absolutely passable exam; I know this for a fact.  Over the last fifteen years, I’ve assisted countless numbers of MLO wannabes, even those who had failed it numerous times, to pass the NMLS exam.  The key to passing this exam is to know how to and properly prepare for it.

How to Properly Prepare for the NMLS Exam

The NMLS exam’s foundation begins with the NMLS Test Content Outline.  This is the document that is not only used by NMLS 20-hour course providers to create their 20-hour courses, but also constitutes the guidance used by the Conference of State Bank Supervisors (CSBS) to create the NMLS exam itself.  It’s the document to which I refer as, “the Bible.”  And anyone preparing to properly tackle the NMLS exam must use it as the foundation to their preparation.  Although your 20-hour course provider should have already provided you with the NMLS Test Content Outline, you may also access it here.

Please believe me when I say that I completely understand how there is a lot of information contained throughout the NMLS Test Content Outline.  But, just as medical and law students are expected to learn a copious amount of material in order to successfully achieve their goals, the MLO must also be prepared to learn everything that must be learned.  Luckily, the Test Content Outline’s bark is a lot worse than its bite as it contains a measurable amount of generalization and redundancy.

The way to study for the NMLS exam, therefore, is to use the study material that:

  • You should have received from your 20-hour course provider;
  • Appears as references at the bottom of the Test Content Outline;
  • You can acquire through; and
  • You can research for yourself through the Internet.

Caution!  If you research topics through the Internet, please be certain to thoroughly vet the source.  There is a lot of obsolete and incorrect information out there so make sure that what you study is current and emanates from a credible source.

With your study resources in hand, start from the top and move down the Test Content Outline, learning everything on it, item by item, until you’ve reached the end.  Once you’ve thoroughly learned everything appearing on it (and this involves understanding the material in addition to knowing it), and once you’re consistently scoring in the mid-to-high 90s on quality practice exams (never use practice exams as your sole means for preparing for this exam), and once you understand how to strategically navigate the NMLS exam’s inherently-tricky nature (check out “Maximizing Your Success” – The NMLS Exam Prep Webinar Recording here), you’ll be appropriately prepared to join the ranks of the 50% celebrating in the NMLS exam’s winner’s circle.

For various NMLS test preparation products and services to help you knock the NMLS exam out of the park, please visit AxSellerated Development at

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