How to Become a MLO in Washington

The Washington State Department of Financial Institutions (DFI) provides regulatory oversight for the state’s financial services providers, so that it can protect and educate the public and promote economic vitality. The DFI is self-supporting. It is not funded by state taxes, but through fees obtained by the organizations and individuals it regulates.

Total Washington MLOs:
Annual Percentage Change:

19,311
3.5%

Short Answer

  1. Complete the Pre-Licensure Education (PE)
  2. Pass the National Exam with Uniform State Content
  3. Submit your License Application (Includes a background check and credit report)

From start to finish, the entire process takes about 6 weeks to 8 weeks.

Long Answer

Basic Requirements

  • You need to be at least 18 years or older.
  • A high school diploma, or equivalent, is required.
  • No prior experience is required.

1. Complete the Pre-Licensure Education (PE)

The DFI requires you to complete 22 hours of NMLS-approved education.

The subjects must include the following:

  • 2 hours – Non-traditional mortgage lending
  • 4 hours – Washington Law
  • 3 hours – Federal Law
  • 3 hours – Ethics (Includes fraud, consumer protection, and fair lending issues)
  • 10 hours – Elective topics of your choice

If you don’t have an NMLS ID# yet, you’ll need to get one. Your education provider should be helping you get one. It takes 5 minutes to setup and it’s free through the NMLS.

If you already have NMLS ID #, you’ll just continue using the one you have.

This will be important when you’re done with the course, because your education provider will be submitting your certificates to the NMLS with your unique NMLS ID #. 

The course can be pretty dry at times, but it’s only 20 hours. There are both online and live programs that can range anywhere from 5 days to 14 days.

If you take an online program, you will be required to be logged online for the 20 hour duration. If you are idle for too long, it will automatically log you out.  

2. Pass the National Exam with Uniform State Content (UST)

The National Exam with UST consists of 125 multiple-choice questions. You have 190 minutes to score a 75% or better to pass. The exam fee is $110.

You don’t have to take the 22 hour PE before taking this exam. However, it’s the smarter decision to take the exam after the PE. There are things you will learn in the PE that will help you on the exam, which is not going to be easy.

The NMLS has contracted with Prometric to administer their exams. They are a national testing company, so it will be easy to find a location that is close to you.

The first step to applying for the National Exam with UST is to enroll on the NMLS website, where you’ll pay the $110 testing fee.

Once you’ve enrolled, you can schedule an exam on Prometric’s website or by calling them at (877) 671-6657.

You have 180 days to take the exam from the date that you enrolled on the NMLS website. Otherwise, you will have to repay the $110 exam fee again.

How hard is the exam? I think the pass rates say it all…

National Exam with UST Pass Rates

 Tests TakenTests PassedPass Rate
1st Attempt61,79835,91858%
Subsequent Attempts27,11011,57043%
Overall88,90847,48853%
Source: NMLS; Tests administered between 1/1/2017 to 12/31/2018

Why is it so hard?

In my experience, the #1 reason why people struggle is that they simply haven’t prepared enough for it.

This exam covers the latest mortgage laws and regulations. It doesn’t matter how “smart” you are, you cannot “think” your way through this test. You basically have to just memorize the laws, which are changing all the time.

Just in 2018, there was a huge change to the TILA-RESPA Integrated Disclosure (TRID) rule. A big part of the exam tested you on this, so unless you were familiar with these updates, you would not have passed.

If you fail the exam, it’s not the end of the world. You can re-test 30 days later. If you fail again, then you will have to wait another 30 days to re-take the exam. If you fail on your third try, then you will have to wait 180 days.

3. Submit Your License Application

Once you pass the National Exam with UST, you will fill out the Multistate Uniform Individual License Form (MU4 FORM) online at the NMLS website.

This is your typical application form where you put down your contact information, employment history, and disclose any financial or criminal incidents in your past. This has a $155 application fee.

There will also be a federal background check with the FBI. This is done by getting your fingerprints taken at an NMLS authorized Live Scan Provider. You can schedule your fingerprinting appointment here. The turnaround time is usually only 48 hours. The Live Scan fee is $36.25.

If you had your fingerprints taken in the NMLS within 3 years, then you do not need to be reprinted.

 

Why is there a credit check?

The logic goes if you are not financially responsible in your own personal life, then it probably would not be a good idea to entrust you to help the general public with their finances.

The SAFE Act has given each state the discretion to determine what financial responsibility looks like. There is no minimum credit score to get approved (at least, one that’s disclosed to the public).

Every applicant’s financial history goes under a comprehensive review by the NMLS on a case-by-case basis.  The fee to run your credit report is $15.

If you are worried about this, I suggest reviewing your own credit report first. Everyone gets a free annual credit report from www.annualcreditreport.com. Credit Karma and many other online providers nowadays will be able to give you your credit score for free.   

The DFI reviews the application in the order they are received on a first come, first serve basis. Your application status will be “Pending-Incomplete” until all the above criteria are met. At that point, your application will begin its review. You can check your application status online.  

Once your License Application is approved, you will be a licensed Mortgage Loan Originator in Washington!