SAFE Mortgage Loan Originator Test Webinar September 10

SAFE Mortgage Loan Originator Test Webinar September 10 th, 2009 NMLS Testing & Education State Regulatory Registry LLC a CSBS company

Your Hosts • Anne Altman – Manager, Mortgage Testing Programs – aaltman@csbs. org 202. 728. 5750 • Pete Marks – VP, National Mortgage Testing & Education Programs – pmarks@csbs. org 202. 728. 5723 • Rich Madison – Director, Mortgage Education Programs – rmadison@csbs. org 202. 728. 5737 Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Conference Call Logistics • *6 to mute and un-mute your call • Please do not put your phone on hold • Please identify yourself and your organization when asking a question Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Agenda • SAFE MLO Test: Background Info & Test Specifications • Pieces of the Test Development Puzzle – 1. Subject Matter Experts – 2. Content Outlines – 3. Test Questions – 4. Review Committees – 5. Test Forms • Test Administration – Preparing to Take the Test – The Test Center – Computer Test Operations and Functionality • Other Testing Information • Q&A Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

SAFE MLO Test: Background and Overview Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Background Information • SAFE Act requires NMLS to develop tests for MLO’s • NMLS contracted FINRA and its subcontractor, Pearson VUE, to develop the SAFE MLO tests. • NMLS contracted FINRA to administer the SAFE MLO tests using its current dual-vendor channels - Pearson VUE and Prometric’s high-stakes testing facilities. • SAFE Mortgage Loan Originator Test – National Component – State-Specific Test Component Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

National Test Component Basics • All mortgage loan originators must take and pass the national test component • Test questions = 100 – 90 scored – 10 unscored/pretest • Passing score = 75% • National Test Component launched July 30 th Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

State Test Components Basics • Test questions = 55 -65 (varies; determined by state) – 45 -55 scored – 10 unscored/pretest • Passing score = 75% • 10 state tests currently available – AZ, IA, ID, LA, NH, NC, PA, RI, VT, WA – More state tests to be released shortly Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

SAFE Deadlines for Testing Both National and State Components – All new licensees: July 31, 2010 – All existing licensees: December 31, 2010 – Several states have elected to have earlier deadlines * Please check with each particular state’s regulatory authority Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Pieces of the Test Development Puzzle Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Part 1. Subject Matter Experts (SME’s) Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

SME’s are: • selected by each states’ regulators and approved by NMLS • well versed in laws and regulations • a mix of state regulators and industry professionals • able to devote their time, effort, and expertise to the development of the SAFE test Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What do SME’s really do? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

SME’s: serve on one or both of the following test development committees: – National Mortgage Review Committee – State Test Development Committee Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

SAFE National and State Test Committees • Reviewed and provided input on national or specific state test component content outlines • Examined, revised, and approved all test questions on national and state test components • Will participate in future content outline and test question maintenance cycles Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Part 2. Content Outlines Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What are Content Outlines? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Here’s what they look like… Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Here’s what they look like… Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Content outlines are: • The basic structure or blue print for the test • The roadmap for constructing test questions • A tool to help candidates prepare for the test Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“Tell me more about content outlines…” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Content Outlines • Each test component has its own outline – national component – all state specific components • Outlines map out: • specific test content and • question distribution (weightings) Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“How were the content outlines created? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Development • Fast Track – national and first 11 states (AZ, IA, ID, LA, MA, NH, NC, PA, RI, VT, WA) • Normal Track– all remaining states Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Fast Track Content Outlines National Component • Drafted by regulator work group • Reviewed and approved by national committee State Components • Template established by regulator work group • Approved by national committee • Customized for each state by state specific test committee Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Normal Track Content Outlines Job Analysis • In April 2009, a job analysis survey was conducted • Individuals from the 55 states/jurisdictions were invited to participate • Invitations were sent to regulators and industry professionals • Over 10, 000 people responded Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Normal Track Content Outlines The job analysis survey results: – produced only minor revisions to state outline template weightings – validated the original national outline Moving forward: – all future states will use new content outline template – during annual test maintenance cycle, FT states will incorporate new outline template Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“Can I access these content outlines? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Yes, Absolutely! Outlines are on the NMLS Resource Center Professional Requirements> Testing> Test Availability Schedule and Content Outlines Currently posted: – National outline – State outlines • AZ, IA, ID, LA, MI, NH, NC, PA, RI, VT, WA • DC, GA, KY, MD, NJ, VA, WY (just posted) Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Content Outlines content outlines Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

And we should also mention… • Content outlines are an overview of what will be on the test. • They can be utilized as a study tool for test takers. No additional study guides or study materials will be developed or endorsed by NMLS. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Coming Soon: More Outlines In early November, more content outlines will be posted (SD, NE, AR, NM, NY, MS) • As new states come on board, new outlines will be developed and published • Check back often Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Part 3. Test Questions Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“How are test questions created? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test questions are: • Written by subject matter experts • Reviewed, edited, and approved by committees • Created from content outline categories and subcategories • Supported by reference materials (laws, regs, etc. ) Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Questions Debunked • All questions are 4 -option multiple choice • No short answer, fill-in-the-blank or true/false • Only one correct answer and 3 incorrect options • No “All of the above” or “None of the above” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Questions Debunked • No trick questions – No questions with multiple correct answers – No questions without a correct answer • Good wrong answers • No proper names – “A borrower is applying for a loan. . . ” not – “John is applying for a loan…” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“Why are some questions not scored? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Un-Scored (Pretest) Questions Un-scored questions are being “tried out. ” We only want to put onto our tests questions that meet high quality standards. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

The Process for Un-Scored Questions 1. 2. 3. 4. We gather statistics on them first When we have enough “hits”, psychometricians analyze the stats They are reviewed to determine if a question is problematic Eventually, questions that “make the cut” become scored questions Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Un-Scored Questions: • Do not affect a candidate’s score • Are not marked in any visible way to the test-taker (candidates can’t distinguish between a scored or an un-scored question) • Are scattered randomly throughout the test Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What if a law changes that affects a test question? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test and Item Bank Maintenance • All questions are reviewed annually • If a new law affects a question, it will be addressed • During maintenance, pretest questions can become scored and old scored questions may be retired • After maintenance, new versions of the tests are released • If an outline changes, it will be updated online (with new date posted) Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test and Item Bank Maintenance What if a law change goes into affect prior to the scheduled maintenance cycle? • Updates to laws and rules are consistently monitored • If a question is found that is no longer accurate, the following steps may occur: – SMEs may be called on to access the validity and edit or revise if necessary – A question may be retired and replaced with another Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Part 4. Review Committees Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Who is included in the State Review Committees? Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

State Review Committee • 6 – 8 state industry representatives • Experienced in mortgage industry (time and professional associations) • Balance of regulators and industry professionals • Requires time and dedication Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“How much time and dedication does this take? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Virtual Meetings • All meetings are conducted by Webinar • There a total of 8 -9 meetings • The committee has one meeting a week • The committee agrees on the same day and time for each weekly meeting Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Why virtual meetings? • Maximum flexibility in scheduling and requires only a computer and a separate phone line • Pearson VUE can work with multiple states concurrently • Each committee member can see test questions directly with no security risks of paper copies • Ability to track progress and customize the next steps, including which items to present, depending on the state’s unique issues Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

What do the meetings accomplish? • The first meeting is focused on developing content outline and is 2 hours • The next 6 -8 meetings are focused on approving test questions and are 4 hours each Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Same Goal, Different Role • Test development knowledge versus content knowledge – Pearson VUE is expert in how to test – Subject matter experts know what to test • Every process step is introduced by a training presentation of about 30 minutes Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Committee Process Steps • Review content outline template and develop a customized, state-specific test blueprint • Review test question root pool; customize content and approve questions for use on test • Develop new test questions for unique state-specific content areas • Classify test questions to the areas of the content outline • Reference test questions to state law, regulations, and rules Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Part 5. Test Forms Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What are test forms? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Forms • Definition: Forms are the different versions of a test • Purpose: The purpose of having multiple forms in a test is to enhance test security Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Forms • For example, the national test component has 90 scored and 10 un-scored questions. • The different forms (versions) of the test all have the same number of questions. • To ensure fairness and reliability, different forms of the national test are all of equal difficulty. • Questions present in random, computer-generated order each time for each form. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Administration Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Preparing to Take the Test Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

MLO Testing Handbook Nationwide Mortgage Licensing Everything you need to know State Regulatory Registry LLC a CSBS company about testing

Enrolling: Step-by-Step Instructions Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Enrollment Basics • A candidate does not have to complete education prior to enrolling or taking a test. • Before enrolling, a candidate must have a unique NMLS ID number (must either already have made a filing or created a base record). • A candidate must request and pay for an enrollment in NMLS before scheduling a test session (*enrollment fees are non-refundable– listed on testing page). • Each enrollment window is open for 180 days, during which the candidate must schedule to take the test. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“After candidates create enrollments, how do they schedule test appointments? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Next Step: Scheduling a Test Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Basics of Test Scheduling • To schedule, must have an NMLS ID number • 500 test centers for candidates to choose from (Pearson and Prometric) • After selecting a state on “Find a Test Center” page, a list of all test centers in that state will appear • Scheduling– online or over the phone Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Basics of Test Scheduling– More Info • All tests are available at all test centers (i. e. candidate may take AZ test component in PA) • A company can request a group appointment (see Prometric or Pearson web sites for more info) made if Nationwide Mortgage Licensing *Special accommodations requests may also be necessary. State Regulatory Registry LLC a CSBS company

Basics of Scheduling– More Info “Can a test-taker schedule the national test component and a state component on the same day? ” Yes, but only if a test center has two back-to-back appointments available. However, please encourage candidates not to overlap their testing appointments or they can run out of time! (*The test time for the national component is 3 hours and each state component is 2 hours. ) Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What if a candidate needs to reschedule a test appointment? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Rescheduling a Test • • Must contact Pearson VUE or Prometric directly to reschedule Must be rescheduled no later than 12 p. m. local time two business days prior to appointment Appointment scheduled for: Must be cancelled or rescheduled no later than 12: 00 p. m. local Sunday, Monday Thursday of the preceding week Tuesday Friday of the preceding week Wednesday Monday of the same week Thursday Tuesday of the same week Friday Wednesday of the same week Saturday Thursday of the same week *If a holiday occurs during the normal cancellation/reschedule period, this schedule adjusts to define "timely cancellation" as one day earlier than stated above. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

The Test Center Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Entering the Test Center • Arrive 30 minutes prior to test time • Must bring a current, government-issued ID with candidate’s photo and signature. • Will be photographed; finger or palm print may be taken • Candidate may not bring anything into testing room (may be asked to show empty pockets) • All belongings such as notes, cell phones, watches, wallets must be placed in locker • Basic calculator (not financial calculator) and scratch paper are provided • Must read and agree to the Rules of Conduct Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Security-- Policies • All candidates must read and agree to the “Rules of Conduct” prior to taking the test. • They stress the confidentiality of all of the test questions and test materials, as they are the copyrighted, proprietary property of NMLS. • Any attempt to modify, publish, transmit, or create derivative works of the test materials, in whole or in part, is a direct violation of copyright laws, the Agreement and the Rules of Conduct and will subject you to federal and/or state sanctions. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Security--Policies • Also, when creating a base record, NMLS users agree to use the system and its test “only for activities related to obtaining or maintaining a mortgage loan originator license”. • Candidates who violate or may violate the Agreement, the Rules of Conduct, or copyright laws, who own, operate, are employed by, or are otherwise affiliated with organizations that are NMLS Approved Course Providers or organizations that intend to seek NMLS Course Provider Approval status, may cause their NMLS Course Provider applications to be denied or their Approval status to be revoked, suspended, or subject to other sanctions. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Computer Test Operations and Functionality Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Time-- National Component • 2. 5 hours test time (150 minutes) • 15 minutes allotted for tutorial (before test) • 15 minutes allotted for optional survey (after test) • Total seat time = 3 hours • 100 questions in 150 min. = 1. 5 min. per question Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Time– State Components State Test Components • 1. 5 hours test time (90 minutes) • 15 minutes allotted for tutorial (before test) • 15 minutes allotted for survey (after test) • Total seat time = 2 hours • Approx. 60 questions in 90 min. = 1. 5 min. per question *State test lengths vary from 55 to 65 total questions Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What is the computer test functionality? Is it simple to use? How does it work? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Tutorial and Test Functionality Tutorial walks candidates step-by-step through test functionality. Some key features that candidates can utilize: – Toggle back and forth between test questions – Mark a question for review and then come back to it later on – Change an answer Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Exit Survey • The exit survey is completely optional. • All of the data collected in the survey is monitored and shared with us. • Candidates may also provide feedback to the test center administrator on the enrollment process, test center facilities, content of test questions, etc. All comments will be reported. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Score Reports At the end of the test session, candidates will: • see their test scores on their computer screens • receive a paper copy of their score report These scores do not become official until they are entered in NMLS. Within 48 hours of completing a test, candidates will receive an email informing them that their official scores are now ready to be viewed in NMLS. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

“What happens if a candidate fails? ” Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

If a candidate fails… Score report has a diagnostic table that informs candidates of how they performed on each outline content area. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Retake Policy Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Retake Policy • Must wait 30 days between each test taking attempt • May create an enrollment and schedule an appointment, but can’t take the test prior to the end of prescribed wait time • After every fourth failed attempt, a 180 day wait time is instituted *After passing a test component, a test taker will not be allowed to retake that particular test component. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Other Testing Information Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

State Test Certification • Some states that had valid tests prior to the passage of the SAFE Act may elect to certify their state tests. • In these cases, candidates who previously passed that state’s test may not be required to take the SAFE state test component. • Candidates must check with their state regulators. • All candidates, however, must take and pass the national component. Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Test Enrollment Update National AZ IA ID LA MA NH NC PA RI VT WA Total Enrollments 1230 8 53 15 40 7 19 232 96 9 1 64 Nationwide Mortgage Licensing 1774 State Regulatory Registry LLC a CSBS company

Tests Taken Update National AZ IA ID LA MA NH NC PA RI VT WA 318 3 17 8 21 2 Nationwide Mortgage Licensing 7 46 17 0 1 30 Total Tests Taken 470 State Regulatory Registry LLC a CSBS company

Any Questions? Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company

Your Hosts • Anne Altman – Manager, Mortgage Education Testing Programs – aaltman@csbs. org 202. 728. 5750 • Pete Marks – VP, National Mortgage Testing & Education Programs – pmarks@csbs. org 202. 728. 5723 • Rich Madison – Director, Mortgage Education Programs – rmadison@csbs. org 202. 728. 5737 Nationwide Mortgage Licensing State Regulatory Registry LLC a CSBS company