Key areas to understand and memorize to pass SAFE NMLS exam
- Federal Mortgage Laws and Regulations:
- TILA (Truth in Lending Act)
- RESPA (Real Estate Settlement Procedures Act)
- ECOA (Equal Credit Opportunity Act)
- FCRA (Fair Credit Reporting Act)
- HMDA (Home Mortgage Disclosure Act)
- SAFE Act (Secure and Fair Enforcement for Mortgage Licensing Act)
- Gramm-Leach-Bliley Act
- Bank Secrecy Act / Anti-Money Laundering (BSA/AML)
- Know the specific regulations and disclosures associated with each.
- Mortgage Loan Origination Activities:
- Understand the full loan process (application, processing, underwriting, closing)
- Advertising guidelines and prohibited practices
- Fraud prevention and red flags
- Ethics and Consumer Protection:
- Fiduciary responsibilities
- Fair lending concepts
- Identifying predatory lending practices
- Mortgage Products and Programs:
- Conventional vs. government-backed loans (FHA, VA, USDA)
- Fixed-rate vs. adjustable-rate mortgages (ARMs)
- Qualification guidelines for different loan types
- Calculations and Terminology:
- Debt-to-income ratios (front-end and back-end)
- Loan-to-value ratio (LTV)
- Points and discount points
- Closing costs
- Basic underwriting terms (assets, liabilities, reserves)
Tips for success at the SAFE NMLS exam
- Flashcards: Use pre-made sets of Flashcards to drill down definitions and key rules.
- Correlation: Correlating laws, regulations and their enforcing agencies increase the chances of understanding and retention. Corelating different mortgage types gives more in depth understanding of their peculiarities and differences.
- Practice Tests: Take plentiful practice tests to identify knowledge gaps and get used to applying concepts in a testing format.