Asked by: Russ Frasesbusiness and finance interest rates
What is considered a Hoepa loan?
Last Updated: 22nd January, 2020
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Also question is, what loans are covered by Hoepa?
Under the 2013 HOEPA rule, most types of mortgage loans secured by a consumer's principal dwelling1, including purchase money mortgages, refinances, closed-end home-equity loans, and open-end credit plans (i.e., home equity lines of credit (HELOCs), are potentially subject to HOEPA coverage.
Secondly, what is considered a high cost loan? Under the new rule, a mortgage will be considered high-cost if it is: A first mortgage with an annual percentage rate (APR) that is more than 6.5 percentage points higher than the average prime offer rate. A loan of $20,000 or more with points and fees that exceed 5 percent of the loan amount.
Regarding this, what does Hoepa mean?
Home Ownership and Equity Protection Act
What is the main objective of Hoepa?
Consumer protection legislation designed to shield homeowners from abusive loan practices. It modified the Truth in Lending Act by establishing certain disclosure requirements and prohibiting home equity stripping. Its primary purpose was to stop unethical practices associated with high cost mortgages.