Applicants for mortgage originator licenses who fail their federal and state exams do not do very well if they decide to take the tests over again.

"If you passed the first time, you are in good shape," Pete Marks of the Conference of State Bank Supervisors said at the American Association of Residential Mortgage Regulators' annual conference in St. Louis. "But it's a different story for those who retake the exams."

Marks, who is part of the CSBS team responsible for implementing the Nationwide Mortgage Licensing System and the SAFE Act requirements, said that fewer than two-thirds of those who take the federal test a second time earn a passing grade.

But the pass-fail rate is even worse for applicants who retake their state exam; only 44% pass the test when they retake it.

Marks also reported that "a number" of applicants had taken the test four times and failed all four and that "several" had flunked five times. Applicants who fail four tests cannot retake the exam for six months.

The vast majority of applicants who fail the tests are already working in the mortgage business, according to Marks.

The pass-fail ratio for those taking the exams the first time is 81% for the federal test and 71% for the appropriate state exam. When retake results are included, the overall pass-fail rate is 79% for the federal exam and 65% for the state test.

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