What is a hoepa loan?
What type of loans does HOEPA regulate
HOEPA generally covers the following loan types (primary residences): Purchases. Refinances. Home equity lines of credit (HELOCs or open-end credit) and home equity loans (closed-end loans)
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What does HOEPA mean in real estate
Resources to help industry understand, implement, and comply with the Home Ownership and Equity Protection Act (HOEPA) rules.
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What mortgages are exempt from HOEPA
As discussed above, HOEPA applies to most types of consumer credit transactions secured by a consumer's principal dwelling. As a result, mortgages secured by vacation or second homes are not covered.
What does HOEPA protect consumers from
home equity lending
HOEPA protects consumers from deceptive and unfair practices in home equity lending by establishing specific disclosure requirements for certain mortgages that have high rates of interest or assess high fees and points.
What does HOEPA not apply to
Disclosures Required
HOEPA does not apply to reverse mortgages, new purchases, or construction or home equity lines of credit. If a loan is subject to HOEPA, the lender must make certain disclosures to the borrower at least three days before the loan is finalized.
What is a HOEPA high-cost loan
If you decide to take out a "high-cost mortgage," meaning the interest rate or fees exceed specific amounts, HOEPA provides you with protection against abusive lending practices. This law restricts loan terms and features. It also provides enhanced remedies for violations in a private civil action.
What is not permitted for a HOEPA loan
HOEPA prohibits prepayment penalties for high-cost mortgages. Added prepayment penalty coverage test: More than 36 months after consumption or account opening. In an amount more than 2 percent of amount prepaid.
What are the HOEPA thresholds
HOEPA (§ 1026.32(a)(1)(ii) and Comments 32(a)(1)(ii)-1 and -3): For HOEPA loans, the adjusted total loan amount threshold for high-cost mortgages for the year 2023 will be $22,969, an increase from $22,052 in 2023.
Which of the following is not permitted for a HOEPA loan
Which of the following is not permitted for a HOEPA loan The answer is making a loan solely based on the collateral value of the property. Under HOEPA, you may not make a loan solely based on the value of the borrower's collateral without considering his/her ability to repay the loan.