United States
Hong KongMortgage Loan Origination Activities
The largest content area at 27%, covering the loan from inquiry to post-closing: application, disclosures, income and asset analysis, appraisal and title, underwriting, calculations and closing.
The biggest area on the paper, at 27%. We estimate 32 questions.
It is also the one most study plans treat as a warm-up, on the assumption that doing the job is easier to test than knowing the law. That assumption is wrong and it is expensive.
What it covers
- The loan inquiry and application process
- Required disclosures and the origination timeline
- Income and employment analysis
- Assets, liabilities and credit analysis
- Property valuation, appraisal and title
- Underwriting decisions, ratios and conditions
- Financial calculations
- Closing, funding and post-closing
Where the calculations live
Here, mostly. Ratios, loan-to-value, points, per-diem interest and payment arithmetic all sit inside this area rather than in a section of their own.
That matters for planning. If you have set aside a block for maths and treated origination as reading, you have split one topic into two and will study neither properly.
| Calculation | The formula |
|---|---|
| Housing ratio | Housing payment over gross monthly income |
| Total debt ratio | All monthly obligations over gross monthly income |
| Loan-to-value | Loan over the lesser of price and appraised value |
| Discount points | One point is one percent of the loan amount |
The sequence is the spine
Learn the loan in order: inquiry, application, disclosures, processing, underwriting, conditions, closing, funding, post-closing.
Nearly every question in this area asks about a moment in that sequence. Without the sequence you are memorizing unconnected facts, and there are too many of them for that to work.
Name, income, social security number, property address, estimate of value and loan amount sought. Six items, at 12 CFR 1026.2(a)(3). Once all six exist you have an application and the TRID clock starts, which is why the definition is tested so often.
The three Cs
Capacity, credit and collateral. It is a memory hook rather than a rule, and it maps neatly onto the underwriting subtopics.
Capacity is income and ratios. Credit is history and score. Collateral is the appraisal and the loan-to-value. Most underwriting questions are asking about one of the three.
Common questions
What is the biggest area on the NMLS exam?
Mortgage Loan Origination Activities at 27%, which we estimate at 32 questions.
Where are the calculations on the NMLS exam?
Mostly inside origination activities rather than in a separate section.
What counts as an application under TRID?
Six items: name, income, social security number, property address, estimate of value and loan amount sought, under 12 CFR 1026.2(a)(3).
What are the three Cs of underwriting?
Capacity, credit and collateral - income and ratios, credit history, and the property securing the loan.
How should I study this area?
Learn the loan sequence from inquiry to post-closing first, then hang each requirement and calculation off it.