QUESTION
Have
there been any recent changes or developments concerning Testing and Education
Requirements for non-bank Mortgage Loan Originators?
ANSWER
At
the recent NMLS Annual Conference held in Austin, TX, I attended a break-out
session conducted by SRR officials Pete Marks and Rich Madison. Also presenting
was Tammy Scruggs, a Director in the Kentucky Division of Financial
Institutions and Vice-Chairperson of the Mortgage Testing and Education Board.
(MTEB)
The
MTEB has approved Rules of Conduct
which cover test takers, education students and Standards of Conduct which
cover course providers. It has also approved Administrative Action Procedures
which determine how violations and investigations will be managed. Their role
is to act in both an oversight and advisory capacity. The MTEB is comprised of
at least nine state regulators representing each of the five CSBS Districts and
at least one AARMR representative.
Test Administration
The
number of tests administered in 2010 totaled 368,000 and has slowed at a steady
pace staying at the 130,000 level for three years and then further declining to
the 2016 figure of 59,000. The drop is attributed to the decline in the number
of state specific tests, resulting from the introduction of the Uniform State
Test in 2013. The National Test numbers have been at their historical highs
over the last three years with 2017 getting off to a great start.
Test performance has been declining throughout 2016 as
evidenced by the National Test with Uniform State Content First-Attempt Pass Rates
ranging from about 63 % for the first three months of 2016 to an average score
of 58.8% for the last five months of the year. Trends suggest that the quality
of the test takers may be deteriorating.
Content Outline Expansion Program
Presently,
individuals taking the SAFE Mortgage Loan Originator Test National Component
with Uniform State Content can review a Content Outline that breaks down the
sections of the test by categories and provides topics covered in each section
along with the percentage of the questions coming from each section. The
outline is roughly three and one-half pages. The outline will be going through
a revision which will take the outline to four times the detail that is there
now to about 16 pages. It is expected that test takers will have a much broader
understanding of the test elements without exposing the test content. The
content of the test will remain the same. It is expected to be implemented,
subject to getting the necessary approvals, sometime in the second quarter of
this year.
It
was pointed out that the test taker is responsible for changes that may have
occurred in laws and regulations within the test cycle. Below is the actual
language that appears.
Legislative
Updates Legislative changes may occur throughout the
test administration cycle. Candidates are responsible for keeping abreast of
changes made to the applicable statutes, regulations and rules regardless of
whether they appear on this outline or the test.
Also in play is a Standard Setting Process which will link a passing score to the
ability level of a minimally qualified candidate. A Subject Matter Expert Panel
will evaluate the test resulting in the evaluation of the panel output.
UST
Adoption
The State adoption of the Uniform
State test has been very successful. Florida and Arkansas have either adopted
the test or will do so shortly. That will leave the remaining states not
adopting to four. Of those four, Utah, Minnesota and South Carolina have legislation
in motion to allow adoption. West Virginia has been meeting with CSBS
leadership to further discuss adoption. It is possible that all states may be
using the UST by the end of 2017.
Test
and Education Security
Enhancements to the security of
education programs and tests have been made during the period. A Candidate
Agreement has been completed. Candidates must sign the agreement in advance to
be able to proceed with testing. Rules of conduct for education students are
also completed and in place. The MTEB is now allowed to act in an appellate
capacity on cases brought before them. Web surveillance is also in place with
the primary focus of searching for misuse of test content. Student
authentication is in process. The concept is to find a way to determine that
the online course taker is legitimate.
The number of investigations is quite
low. Twenty-five cases were investigated in 2016 which represented a 50%
reduction over the previous year. Some of the areas of concern are bad content
at the test center and MLO’s changing the test score on the score report and
presenting it to their employer.
Alan Cicchetti
Director/Agency
Relations, Lenders Compliance Group
Executive Director/Brokers Compliance Group
