Mastering MLO Origination Activities

Loan origination activities encompass everything from the initial consumer inquiry to the final signing at the closing table. For the 2025 NMLS exam, you must be proficient in the Uniform Residential Loan Application (Form 1003) and various financial calculations.

1. The 6 Pieces of a Complete Application

The "clock" for TRID disclosures starts once a lender has these 6 pieces of information (Acronym: **PENSIL**):

• P: Property Address
• E: Estimated Property Value
• N: Name of the Borrower
• S: Social Security Number
• I: Income
• L: Loan Amount Requested

2. Mortgage Math Essentials

You will be tested on several key ratios. Remember these formulas:

• LTV: Loan Amount ÷ Appraised Value (or Purchase Price, whichever is lower).
• DTI (Front-End): Total Housing Expense ÷ Gross Monthly Income.
• DTI (Back-End): (Total Housing Expense + Other Debts) ÷ Gross Monthly Income.

3. Appraisal and Title Insurance

Appraisers use three main approaches: Sales Comparison (residential), Cost Approach (new construction/special use), and Income Approach (commercial/investment). Title insurance is required to protect the lender (and optionally the owner) from liens or ownership disputes.