What Happens If You Fail the NMLS Test?

Why Is Failing the NMLS Exam So Common?

If you failed the NMLS test, you are in good company. In fact, only 56% of NMLS test takers pass the exam on their first attempt. This figure is low compared to the percentage of prospective attorneys who pass the Bar Exam (75%) on their first attempt. So, as a prospective Mortgage Loan Originator, it's natural to wonder why the test questions are so difficult. In a nutshell, there are three factors that combine to make the test challenging for so many people:

1. The test developers designed the test to be challenging to ensure compliance with the Safe Mortgage Licensing Act (SAFE Act).
2. Some test takers fail because they cannot grasp, fully understand, or apply key concepts.
3. Test takers do not devote sufficient time to studying or preparing for the exam.

Fortunately, you can overcome all three of these potential roadblocks with proper planning and preparation. This guide will help you map out a plan of attack to boost your chances of passing the NMLS on your second attempt.

Requirements to Pass the SAFE MLO Test 

Before diving into the steps you can take to achieve a passing score, it is helpful to fully understand the requirements to pass the SAFE MLO Test. To pass the test, you must earn a score of 75% or higher. If you fail to answer at least 75% of the exam questions correctly, you can retake the test in 30 days.

How Many Times Can You Take the NMLS Test? 

You can take the NMLS test an unlimited number of times until you achieve a passing score. However, you must allow a predetermined number of days to elapse before you can retake the exam. This requirement varies according to the total number of times you have taken the exam. For instance, you must wait 30 days after your first or second failed attempt before taking the test again.

If you fail the test on your third attempt, you must wait at least 180 days before you can try again. Once 180 days have elapsed, a new "retake cycle" begins and you only have to wait 30 days after your fourth and fifth attempts. But if you fail the test on your sixth attempt, you must wait 180 days again until you can begin a fresh test-taking cycle. You can repeat this "retake cycle" as many times as needed to achieve a passing score.

Pro Tip: 

If you fail your test, you can go ahead and pay for your next test. However, you must wait until the end of your required waiting period to schedule your next test date.

Steps to Take After Failing the NMLS Test

Now that you have a clearer understanding of the testing requirements, you can map out a plan to pass the NMLS test on your next attempt. As you sit down to craft your plan, try to reflect back on your last test experience to determine whether there were any extenuating circumstances that may have contributed to your poor score. You might be able to control some of these factors next time you take your exam. Here are some examples:

• Insufficient Sleep: Select a date that will allow you to get to bed early and get plenty of rest in the days leading up to your test.
• Test Anxiety: Test anxiety is not limited to high school or college students. You can help curb anxiety by practicing relaxation exercises.
• Information Overload: Trying to remember every concept taught in a 20-hour course can be overwhelming!

If you feel that any of these issues had a negative impact on your test score, then make sure you have a strategy in place so you do not recreate a poor test-taking experience. Then, follow the tips below to organize your approach as you plan to retake the exam.

Identify Your Weak Areas on the NMLS Test 

The path to an improved score on the SAFE Exam begins with an understanding of your weaknesses. By identifying your weak spots, you can devote more time to mastering content in those areas. Exam content covers a wide array of topics pertaining to REALTORS®, homeowners, lender responsibilities, borrowers, and pertinent laws such as the Real Estate Settlement Procedures Act (RESPA) and The Truth In Lending Act (TILA). 

In general, most questions fall into one of the following five general categories:

Schedule Your Next NMLS Exam

You become eligible to schedule your next exam once the required amount of time has elapsed following your most recent unsuccessful testing attempt. For example, if you are scheduling your second or third attempt, you may schedule your next exam in 30 days. If you are scheduling your fourth exam, you must wait at least 180 days to take your exam. 

Revisit Your MLO Pre-Licensure Education Course

Pre-Licensure Education courses typically include a valuable collection of resources and a host of study tools such as flashcards and practice tests. By resurrecting your course materials and reviewing them on a regular basis until you retake your exam, you can help ensure that relevant content is fresh in your mind.

As you review your Pre-Licensure course, remember to consider your weaknesses. For example, if you missed questions pertaining to the Truth In Lending Act (TILA) and illegal flipping, you may wish to spend more time reviewing Ethics-related content. Additionally, it is wise to make sure you are highly familiar with federal mortgage-related laws and mortgage loan origination activities, as more than 50% of exam questions fall within these two categories.

Check in With Your Sponsoring Employer

If you currently work at a bank or mortgage company, your employer may have internal requirements you must follow. For example, they may require you to obtain a passing score by a pre-specified date. Your employer may also have a genuine interest in helping you navigate your path to becoming a Mortgage Loan Officer. 

For these two reasons alone, it is important to check in with your sponsoring employer when you receive your test results. This is usually simple if you pass your test or have good news to share. However, you may be tempted to avoid breaking the news if you failed your exam. While you might be a bit embarrassed to share your results, it is important to be transparent with your employer for three reasons:

• Your employer is likely aware that many successful licensed Mortgage Loan Officers failed their exam on the first attempt.
• Honesty and transparency are important qualities for an aspiring Loan Officer in the mortgage industry to possess.
• Your employer may have a library of practice exams or know of a good Exam Prep program that could help you.

Finally, remember your employer knows the path to mortgage excellence is filled with challenges. Even some of the nation's top mortgage lending experts struggled to pass their licensing exam, so do your best to maintain a positive outlook as you continue down the exciting path to licensure.