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Stand Alone Uniform State Test- Time is running out!

Stand Alone Uniform State Test- Time is running out!

The 25 question Stand Alone Uniform State Test is about to expire. As of April 1, 2014 the temporary, shorter stand alone test will no longer be available. Therefore if you want to get licensed in a state that no longer has a state exam requirement you need to get on the ball.  The question is should you take it? The best, shorter, easier and cheaper answer is yes.

On April 1, 2013, the Uniform State Test was added to the national component of the SAFE Act exam, making this test now 125 questions long. The SAFE Act was created under the Housing and Economic Recovery Act in 2008.  This act requires that all people who are engaging in mortgage loan origination activities for compensation or gain or expectation of compensation or gain, have a mortgage license or be federally registered.  If you are not working for a federally regulated institution (ie banks, credit unions, etc), then you must obtain a mortgage loan originator license, in every state you do business.

Up until April 1, 2013, all states required two exams , National Component and State Component, to be taken and passed with a 75% or better.  Since that date, 39 states including Puerto Rico, Virgin Islands, and the District of Columbia have chosen to no longer have a separate state exam and to only require the National with UST exam or National Exam and Stand Alone UST exam. The states that have adopted the UST are listed below:

Alabama, Kansas, New Hampshire, Texas, Alaska, Kentucky, New Jersey, Delaware, Louisiana, New Mexico, Utah DFI, District of Columbia, Maryland, North Carolina, Vermont, Georgia, Massachusetts, North Dakota, Virgin Islands, Hawaii, Michigan, Pennsylvania, Virginia, Idaho, Mississippi, Puerto Rico, Washington, Florida, South Carolina DCA, Indiana DFI, Montana, Rhode Island, Wisconsin, Indiana SOS, Nebraska, South Dakota, Wyoming, Iowa, Nevada, and Tennessee.

These states agencies may elect to adopt the UST at a future date, but are not now and are not required to do so.  Candidates becoming licensed in these states will need to pass an individual state test:

Arizona, Missouri, Arkansas, New York, California, Oklahoma, Ohio, Colorado, Oregon, Connecticut, South Carolina BFI, Florida, South Carolina DCA, Illinois, Utah DRE, Maine, West Virginia, and Minnesota.

You may be asking yourself, “If I took the national exam before April 1, 2013 and want to get licensed in another state that is now participating in the UST, do I have to take the national exam all over again?” The answer is, no, at least for a short period of time.  One year after implementation of the UST exam a shorter Stand Alone test is available.  However, this option is only in effect until March 31, 2014. However, if you do not take the Stand Alone UST exam by the expiration date, the only way to get a license in a state that is participating in UST will be to take the national exam again. The difference between the old, and now retired, national exam and the new national exam is that it now includes the UST section.  The entire exam is 125 questions and you must obtain a 75% score to pass.  The results will not affect your current license if you have one, but it will prevent you from getting a license in another state if you fail.

It’s extremely important to understand, simply taking the UST stand alone exam or the national with UST will not allow you to start doing loans in those 39 states. You must go online to the NMLS website click on the state you want to do loans in and meet all of the state’s requirements, pay the fees, submit all the necessary information and get approved by each state before you can do loans in any of the UST states.  Again, if you don’t take the Stand Alone Uniform State Test by April 1, 2014 you will have to take the entire new National with UST exam again in order to do loans in any UST state. Also, the company you work for must be licensed in those states in order for you to write loans there.

Some states require additional state specific education, audited financials, state background checks, child support statements, and so on. Simply taking the UST Stand Alone exam or the National with UST included, does not allow you to do loans in the 39 currently participating states. Another important item to realize is that once you do get approved in a state you must pay for and renew each license, in each state, every year.

The next thing people wonder is what’s on the UST exam.  The 39 states that will be participating in the new UST rules have agreed to certain Model State Law. Basically this means that these states all agree to the same rules, restrictions, requirements and guidelines. To help you prepare for the Stand Alone UST exam we have created a test prep package that details everything you need to pass this exam. Our Sr Instructor, Sharmen Lane, tested this information and passed the Stand Alone exam with a near perfect score. To obtain the test prep package go to  This test prep package includes:

  1. A 2 hour recorded webinar
  2. A 2 hour audio mp3 file
  3. A study booklet
  4. Powerpoint slides
  5. Practice Exam

Only you can answer the question “Should I take the Stand Alone UST exam?” If you think you may want to get licensed in another state within the next five years then the answer is yes. The Stand Alone Exam only costs $33 and is good for five years.  If you wait until after April 1, 2014 the Stand Alone option will no longer be available and you will have to pay $110 and take the National 125 question exam.  Anyone who remembers how difficult the national exam was should absolutely take the Stand Alone exam while you can.

If you have any questions you are welcome to email us at or visit our website to obtain more information on test prep packages, licensing courses, loan officer and processor training.

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  • Updated February 13th, 2014 08:39 am
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The New HOEPA of 2014

The Home Ownership and Equity Protection Act (HOEPA) was originally created in 1994 as an amendment to the TILA, to protect home owners from potentially abusive lending practices in the home-equity lending market. It was later amended in 2002, which are the most recent guidelines that were followed until January 10,2014 when it was amended again under the Dodd-Frank Act.

The rules under HOEPA originally applied to a closed-end home-equity loans (NOT including purchase transactions) which had rates or fees above a specified percentage or amount.  A loan was considered to be a HOEPA loan (aka Section 32 or High Cost Loan) when it had an APR exceeding the rate for Treasury securities with a comparable maturity by more than 10 percentage points, or the points and fees paid by the consumer exceed the greater of 8 percent of the loan amount or $400(based on the per year cost amortized over the loan term).  That $400 was an amount that changed each year base on the Consumer Price Index.

In 2002, the rules were changed due to a significant increase in subprime lending. The trigger for the APR on a first-lien mortgage loan was reduced from 10 percent to 8 percent and remained at 10% for a second-lien. Again the dollar figure that was originally $400 changed every year and in 2002 was $480.  In 2013 the HOEPA dollar amount trigger had increased to $625.

Then in 2014 new changes to HOEPA were added and amended expanding the scope of HOEPA coverage to include purchase-money mortgages, refinances, closed and open-end credit plans (i.e., home equity lines of credit, or HELOCs) and amended HOEPA’s coverage tests. HOEPA rules do not apply to reverse mortgages, second homes, vacation homes, initial construction loans, FHFA loans (ie harp) and USDA loans.

Today a loan is considered to be HOEPA when one of the following occur:

  • The transaction’s annual percentage rate (APR) exceeds the applicable average prime offer rate (APOR) by more than 6.5 percentage points for most first-lien mortgages, or by more than 8.5 percentage points for a first mortgage less than $50,000.
  • The transaction’s APR exceeds the applicable APOR by more than 8.5 percentage points for subordinate or junior mortgages.
  • The transaction’s points and fees exceed 5 percent of the total transaction amount or, for loans below $20,000, the lesser of 8 percent of the total transaction amount or $1,000.
  • The adjusted statutory fee trigger of $632. (Based on the per year cost amortized over the loan term)
  • A prepayment penalty for more than 36 months after consummation or account opening, or an amount more than 2 percent of the amount prepaid.

If you do a loan that meets any one of the above triggers then you must give additional disclosures, avoid certain loan terms, and ensure the consumer receives additional protections, including homeownership counseling. To learn the calculation formulas, disclosures, terms, protections and counseling required, review the compliance guide available on the CFPB website at

As you can see, there are many changes to High Cost or Section 32 loans also known as loans that fall under the Home Ownership and Equity Protection Act.  As with all mortgages laws it’s important to stay up to date with new laws and changes to old ones.  To help you do this the CFPB has compliance guidesand tables at

For more information visit or email us at



Mortgage Disclosure Improvement Act is a newer law that was created in part due to the mortgage crisis that occurred in 2008. This law was passed by the Federal Reserve Board inJuly 2008 and became effective in July 2009. Its main purpose is to make certain early disclosure requirements mandatory on non-purchase transactions that were previously only required on purchase transactions. It also requires waiting periods between the time when disclosures are given and closing of the mortgage transaction.

MDIA now applies to:

  • Any extension of credit secured by the dwelling of a consumer.
  • Refinance loan transactions and home equity loans.  It does not apply to Home Equity Lines of Credit.
  • Non Owner Occupied, aka investment properties.

Disclosures are now required to be given to consumers explaining that they are not obligated to complete the transaction simply because disclosures were provided or because they applied for a loan.

The MDIA is the law that created what we now know as the 3/7/3 rule. The rule requires creditors to make reasonable estimates of the required mortgage disclosures, and deliver or place them in the mail, no later than three (3) business days after receiving a consumer’s application for a residential mortgage loan. The loan closing may occur on or after the seventh (7) business day after the delivery or mailing of these disclosures. If the APR provided in the estimate changes beyond a .125 on a fixed rate or .25 on anything other than a fixed rate loan, a creditor must provide corrected disclosures. The corrected disclosures borrower must be received on or before the third (3) business day before closing of the transaction in order to be in compliance. In case you are not aware, a business day is considered all days except Sunday or Federal Holidays.

Prior to 2008 a mortgage company or loan officer could collect the credit report fee, the appraisal fee, application fee and any other “junk” fees upfront at the time of the loan application. However, today MDIA says that no fee other than the credit report fee can be collected prior to the borrower receiving the early disclosures. Also, only the bona fide fee for the credit report can be charged to the borrower, no profit can be made on this third party fee.

As you can see, the Mortgage Disclosure Improvement Act is all about making information clear and available to the consumer. Historically that was not always the case. In today’s environment, many feel that the mortgage industry is over-regulated and over protective of the consumer. However, much of the mortgage meltdown was due to lack of disclosure by creditors and poor knowledge or understanding by the consumer.  This law benefits both the creditor and the consumer.  If the lender does their job properly and provides disclosures as required they can’t be accused of not giving the borrower the details of their loan. If the consumer is given the disclosures they can’t play the ”I didn’t know” card.  Therefore, it can be viewed that this law holds the lender accountable and the borrower responsible and that is the best of both worlds.

If you would like to learn more about the Mortgage Disclosure Improvement Act you can review the Federal Reserve Board’s newsletter called the Federal Register at

For more information visit,


The Fair Housing Act

The federal government has many laws in place to prevent American’s from being illegally discriminated against.  Among them are the Civil Rights Act, Community Reinvestment Act, HMDA, ECOA, and the Fair Housing Act.  All serve their own purpose, but many loan originators do not know or understand the differences or the value that each one provides.

The Fair Housing Act is Title VIII (8) of the Civil Rights Act. The Civil Rights Act was the first major legislation put into effect in 1866 about discrimination and the Fair Housing Act amended it 1968. The purpose of the Fair Housing Act was to make it illegal to deny renting, leasing, buying or selling of a residence based on a discriminatory reason.

There are seven protected classes under Fair Housing. Family Status, Race, Religion, National Origin, Disability, Sex and Color. As you know, the above factors have no basis on whether or not a borrower has the ability to make their rent, lease or mortgage payment. Therefore, none of the aforementioned should be considered when determining if a property will be rented, leased, bought or sold to a person.

Today most mortgage laws fall under the authority of the CFPB, Consumer Financial Protection Bureau. However, the Fair Housing Act remains under the Department of Housing and Urban Development (HUD).  The CFPB monitors the laws and practices as it relates to financing. However, if a person is denied renting or leasing a residence, that denial would have nothing to do with financing. It does have to do with housing. Therefore, the law mostly specific to housing stayed under the department of Housing and Urban Development.

As with most laws or rules in the mortgage industry, there are exceptions.  And the Fair Housing Act is no exception to that rule. There’s an exemption called the Mrs. Murphy Exemption. This exemption allows for one who is renting out a room in their own home or a unit in their 2-4 unit property to not follow the restrictions under the Fair Housing Act.  Also, if you own 3 or fewer properties and are not using a Real Estate Agent or a Property manager to manage said property, you can discriminate on whom you rent or lease that to. Essentially, the Mrs. Murphy exemption applies in the following circumstances:

1. An individual is renting out a room in their owner occupied residence.

2. An individual is renting out a unit in their 2-4 unit property and homeowner occupies at least one unit.

3. If the homeowner rents out a SFR and the owner owns no more than three such homes at one time, No discriminatory advertising is used, and no real estate broker (or any real estate professional) is used as the property manager.

There you have it.  Those are the rules under which one can and cannot discriminate against a person when it comes to renting, leasing, buying, or selling real estate properties. These rules vary from one state to the next, therefore it’s very important to know the rules where you are operating. For more information on the Fair Housing Act in your state go to or

For more information or to meet your Prelicensing Education or Continued Education needs please contact us at:


The Indispensable Loan Officer

The mortgage industry has always been tumultuous. Dramatic cycles with extreme highs and catastrophic lows has plagued the industry since its inception, and the last six years has been no exception.  Starting in 2007 with major wholesale lenders going under and hundreds more following suit over the next year and half.  Now, in 2013, when you would think the worst was behind us and yet another round of layoffs are announced from major mortgage banks.   Citibank, Wells Fargo, Bank of America, and JP Morgan Chase expect to lay off over 22,000 people from their mortgage departments. The question tends to be, how does a loan officer thrive, not just survive, and be indispensable to their company and their clients.

There’s a lot more that goes into being a good loan officer than just quoting a rate and closing a loan.  If you want to be indispensable to both your company and your clients then you need to go above and beyond to help your borrower, your company and yourself.  For your client, you need to answer their questions, return their calls and emails quickly and efficiently, lock when they’re happy with the rate, and do what is in their best interest and all times.  For your company, or your lender, you need to put together complete files, with explanation letters, VO’s, correct and complete application and summary, and double check your work and your math to make sure what the underwriter sees is accurate. For yourself, you need to constantly be marketing and making outbound efforts to bring in business without depending on leads from your company.

Some of the biggest complaints amongst borrowers today is that their loan officer doesn’t answer their phone, doesn’t return their calls, doesn’t reply to email, didn’t lock when they were asked to and didn’t explain their options or give them the details of their loan program.  Granted, borrowers receive disclosures and other documentation about their loan. However, let’s be honest, disclosures and other mandatory paperwork is not written in layman terms and is difficult for MLO’s to understand much less someone who has never gotten a loan before. In addition, borrowers should be given choices for their loan. If you arbitrarily put a borrower into a 30-year fixed because it’s easiest to sell and explain, then you aren’t representing the borrower to the best of your ability.  Sometimes a borrower asks for it because that’s all they know about. But if a client is in the military, for example, and knows that they will be getting transferred to another city or state in the next 3, 4, 5 years then you, as the expert, need to provide your borrower with all of their best options.

Customer loyalty is very rare in the mortgage industry.  Getting repeat clients or referrals from a past client are few and far between. This is primarily because very few borrowers are happy with how their loan officer performed on their transaction. Once an application is in underwriting and an approval is provided the MLO tends to drop the ball and stops being responsive to the clients needs. Starting off the relationship by providing your client with options and explaining the details of different types of loan programs is the best way for a borrower to gain trust and confidence in you. Reviewing and explaining the disclosures and responding to questions and inquiries will keep your client happy and comfortable throughout the process. After the loan has closed, checking in with the client to make sure all is well and perhaps confirm that they have their payment coupon to make their first payment just in case a statement hasn’t come in the mail yet, can really solidify the relationship. And let’s not forget good old fashioned gratitude. Sending a thank you card, yes a card, not an email, text message, or facebook post, can keep a borrower loyal to you forever. After all, who does that anymore?  Noone, and that is why the borrower will remember you and all your efforts.

Keeping your company happy so you aren’t on the chopping block when a layoff occurs is another great way to become indispensable.  The best way to do this is to put together good, complete, and quality packages. Be thorough and run the income, check the ratios, ask about down payment and assets and make sure they can be proven and supply all necessary documentation. Anticipate what the underwriter is going to ask about (see article on Thinking Like an Underwriter) and have it available in the initial file for review.  Also, properly stack the file so that everything is where it should be. This saves time and underwriter frustration because they don’t have to search through the entire loan to locate what they are looking for.

One of the biggest and best things you can do to keep your company happy is to always be working and hunting for your own business.  A lazy loan officer will just sit at their desk and wait for leads to show up on it.  An indispensable loan officer will always have more business than his colleagues because he is always on the hunt for it.  Go to networking meetings like BNI, chamber of commerce and other local organizations.  Meet with referral partners on a regular basis.  A good loan officer will have at least one real estate agent, financial planner, CPA, bankruptcy attorney, divorce attorney, contractor, personal banker, title agent, escrow agent, closing attorney and insurance provider on speed dial.  Remember these relationships go both ways.  If you want someone to send you business, then you need to send him or her business as well. People who have created and nurtured these relationships will have business coming in from many different resources. They will likely have a bigger pipeline than any of their counterparts and your company will fight to keep you when layoffs occur, because you do more than typical LO.

As you can see there are many ways to make yourself indispensable.  Going above and beyond for your client keeps them coming back to you and sending others your way.  Bringing in your own business and not just counting on company leads helps you and your company stay busy and profitable. Layoff’s and company closings are a part of every business. However, if you do your part for the client and your company, you will never be let go during a RIF.  If your company happens to go out of business and you have to find a new place to set up shop, other companies will be fighting to get you to join their team.

For loan officer or processor training, licensing education, and other sales and marketing tools please visit


NMLS 2013 Continued Education Requirements

If you’re a licensed mortgage loan originator you probably know that you are required to complete a minimum of eight hours Continued Education each year.  What you likely don’t know is that it doesn’t have to be a grueling experience.

The first most important thing to realize is that if you took 20 hours of Prelicensing Education in 2013 then you don’t have to take Continued Education this year. You will need to renew your license and pay your renewal fee to the state or states you’re licensed in, but you wont have to take CE credits.

An important way that Loan Officer School is different than our competitors is that our Continued Education courses do not require an exam.  Our material, which is fully approved by the NMLS, includes a participational case study. This case study takes the place of an exam. The case study is an interactive situational based scenario that ties together all the important material from the course.  That’s a whole lot better way to learn than just Q and A that you will forget the moment you leave the room.  With a case study you can use and apply your knowledge in a situation that’s relevant to your mortgage career.

One of the most common questions we get is, “What format do you offer your CE courses in?” This is again how we differ from our competition. We offer CE courses online with flexible days and hours to meet every schedule.  We also offer live in person classes (we can even do one at your location!) and online self-study programs. However, the online self-study program does require an exam and let’s be honest, who wants to sit and stare at a computer for 8 hours with no human interaction? Not many.  Try one of our live Webinar for a great experience with no testing required.

Some people would love to take a live in person course, however finding the time to be away from your office and clients and finding a location near you can be difficult. That’s why the online live webinar is our biggest seller.  You can complete it from your home or office. You can even complete it from your car in a parking lot with an iPad!  Our webinar’s give you a break every hour so that you can respond to clients and run your business. The live webinars are offered as both a one day 8 hour course or a two day 4 hour course and both are available weekdays and weekends. The good news is you’ll have a live instructor who goes through the material with you. This keeps the information fun, interesting, interactive and relevant which makes the time go by much faster.

“What states are you in?”  That is the a very common question we get here at Loan Officer School. The answer is, all 50 states. So no matter where you are, we have the CE course that will meet your state’s requirement. Most states only require eight (8) hours of Continued Education. However, 20 states require either additional hours or one hour within the eight must be state law. If you are in AZ, CO, DC, GA, HI, ID, KY, MD, MA, MS, NV, NJ, NM, NY, NC, OR, PA, RI, WA, or WV you will have additional requirements beyond the 8 hours or state material beyond that of 3 hours federal laws, 2 hours ethics, 2 hours nontraditional mortgage products and 1 hour elective. For more detail on what your state requires visit this link. NMLS PE and CE state requirements

When it comes to meeting your CE requirements you may as well have some fun and do the class in a way that best meets your needs.  Not everyone can take the day off and sit in a class. Not everyone can, or wants to, sit in traffic at rush hour to sit through a live class miles and miles away. That’s the beautiful thing about our live webinars. You can do them from anywhere and if you have a hard time getting it all done in one day, then you can attend the two day webinar instead.  Both the one day and the two day courses have a ten minute break every hour so you don’t have to worry about losing leads or loans falling through the cracks because you can still run your business while meeting your CE requirements.

Here is what others are saying about the Loan Officer School CE programs:

  • I am so thrilled with Loan Officer School CE live class that I now book Sharmen Lane to hold the 8-hour class at our location every year!  Mary P. It was the best CE class I’ve ever taken. P.H. Orange County, CA
  • The Loan Officer School continued education class taught by Sharmen Lane was amazing. The class was 8 hours class and I was not bored because of the presentation on the material. Thelma M. PhD.

To find a list of live webinars please visit LoanOfficerSchoolwebinars If you have any problems, questions or want to schedule a live class in your office or for your company you can reach us at 866-623-1250.

We look forward to seeing you at an upcoming CE class soon!


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