About the Test
On July 30, 2008 President George W. Bush signed into law a bill, known as the Housing and Economic Recovery Act, which marked an historic day in mortgage lending. Title V of HERA is better known as the SAFE ACT, which goes a long way towards equalizing the educational requirements, at least on the federal level, for loan originators regardless of the state in which they live. This act requires loan originators to take 20 clock hours involving the various and sundry rules and laws why apply to the origination of home loans. Subsequent to the clock hours is a test that requires a score of 75 or better to pass.
The new law requires continuing education every year consisting of 8 clock hours three of which will be devoted to the subject of ethics, and each person’s license will expire 12 months after issuance unless the originator has complied with this new law. Mortgage insiders seem to think this is only the beginning and that future years will see added increases to both pre-licensing as well as continuing education.
The test itself will be geared towards federal laws, but the test will also deal with the question of ethics and test takers should be ready to reason with those questions. It is no secret that dishonest loan originators have profited from either ignorance of the laws or else a premeditated and deliberate breaking of laws which were already in place. After many years of debate this bill becomes the first of its kind. The disparity of pre-licensing education requirements has been enormous from state to state. Many states, until recently, have required no education at all, with regard to the mortgage industry. No one can be grandfathered into a federal license, and the test that will be administered by Pearsonvue will be the same from state to state. That is the good news. As you already know, the cost of the test itself is $92.00, and one would be extremely foolish to take it lightly.
The design of the questions for the test you are about to take here was done to help anybody get a feel for what they can expect when they go to take the federal exam. The test itself is owned by Pearsonvue, and since it is proprietary they do not allow education providers to see it except as a candidate, and even when an educational provider takes the test they are not allowed to takes notes or take a tape recorder into the testing area. The data bank of questions is huge, and anyone taking the test today would not necessarily see many of the same questions were they to take the test again thirty days from today. That is why it is so critical that one be ready with knowledge to answer a great quantity of questions. Rote learning will not be sufficient because it is far different than say, learning the multiplication tables.
Be forewarned: Taking a multiple choice test can be very deceiving. The questions are designed in such a way as to try to make one miss a question if they do not read each and every question with a sharp and critical set of eyes. Questions that make a statement and then end with the word EXCEPT must be looked at very carefully to make sure one is answering the question that is being posed. Being full of great information could tempt one to take the test lightly, but could result in a failing score for having failed to correctly assess what the question actually was. A favorite ploy of test writers is to give more than one answer that could, technically, be correct. In that case the one that is “more” correct is the one to mark.
Example: The role of the VA is :
- to insure loans made to veterans
- to guarantee loans made to veterans
- make sure all veterans have a right to own a home
- to guarantee twenty-five percent of a VA loan
The answer, of course, is D. A, actually is a correct answer, but the addition of “twenty-five percent” makes D the answer that is the correct one.
The test will show only one question at a time, and you will not be able to go forward without either answering the question or marking it for review. When one encounters a question which they have no knowledge of it is strongly recommended that the question be marked for review, and go to the next question. At the conclusion of the test you will be given the opportunity to go back and review all the questions that were marked for “review”. There will be four possible answers for each question, and coming to a decision to answer the question should cause you to focus as clearly as possible to determine two things: [1 the worst possible answer, then [2 the next worst possible answer. Two possibles have then been discarded leaving only two to choose between. When your memory bank just cannot come up with an answer that satisfies you then remember how football games begin...with a coin toss.
When in doubt trust your first instinct regarding the answer you marked. Teachers unanimously agree that graded tests show that an answer previously marked and then erased was the correct one.
If one of the remaining answers is the correct one, and you toss a coin, you will have a 50/50 chance of getting the right one. That may not give you great comfort, but it works. Pearsonvue will give you 90 questions with an additional “10” floater questions that cannot count against you, but they can count for you. You will not be able to discern which are the floaters. You must answer 75 questions in order to pass.
So, let’s do the math. With the pencils and paper Pearsonvue gives each person keep an ongoing count of the questions you are sure you got right. When done count up the correct ones, and let’s say that the number is a disappointing 50. That alone would be scary enough, but don’t panic. If the other 50 required you to do the sorting thing, and you were only successful on half of the questions, that would give you another 25 correct. Added to the 50 you then have a passing grade of 75 out of 100.
Because it is our intent to help you pass the test on your first try we have included 250 questions. They will cover Equal Credit Opportunity Act, Truth In Lending Act, Real Estate Settlement Procedures Act, Community Reinvestment Act, Privacy Act, Home Mortgage Disclosure Act, Americans With Disabilities Act, Federal Fair Housing Act, Fair Credit Reporting Act, Flood Disaster Protection Act, Home Owner’s Protection Act, the Office of Foreign Assets Control as well as questions regarding FHA, VA, Fannie Mae and Freddie Mac.
At the conclusion of this material there is a section on math. What you will find will be questions posed, and then there will be a 1, 2, 3 step process showing you how to solve the problem. This material will be far in excess of the math you are likely to encounter when taking the federal test, but learning the process for solving math problems related to the mortgage and real estate business should be of great benefit to you as you progress in the business.
The questions have been designed to mimic those you will find at Pearsonvue as closely as possible. The answers to the questions are at the end of the material. Study well, focus on the material at hand, and you should be successful when you take the national test. If you are not already aware you should know that failing the test requires 30 days to elapse prior to taking it again.
All the best to you.
NOTICE: ALL PURCHASERS ARE ALLOWED TO TAKE & RETAKE THE TESTS FOR UP TO 90 DAYS.
Having heard from so many loan officers who haven't been required to take a test in several years, it is our desire to offer additional time for taking and retaking the tests. Naturally, we want you to pass the first time, but when one fails we want you to have sufficient time to re-study, so that you pass the next time. And, we want to hear from you as to how our information helped you. Please call us or email us. The two additional months are the result of customer input. We do listen to our customers.
