What is exempt from HOEPA?

Loans Exempt from HOEPA Coverage Reverse mortgages. Construction Loans (applies to only the initial construction of a new dwelling) Loans originated and directly financed by Housing Finance Agency (HFA) Loans originated under the U.S. Department of Agriculture (USDA’s) Rural Development Loan Program.

Which loan types are exempt from HOEPA rules?

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.

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.

What is the cooling off period under HOEPA?

Disclosures (HOEPA) – On High Cost Loans the lender must provide an additional 3 business days day cooling off period and send a written notice stating: 1. the loan need not be completed, even though the borrower signed the loan application and received the disclosures.

What are examples of HOEPA violations?

Practices Prohibited Under HOEPA

  • Mortgage brokers and lenders are prohibited from recommending a default on an existing loan to be once again financed by a high-cost mortgage.
  • Neither creditors, lenders, servicers, or brokers should charge a fee to modify, renew, defer, amend, or extend a high-cost mortgage.

What does HOEPA status mean?

High Cost Mortgages (HOEPA) | Consumer Financial Protection Bureau.

What makes a loan a HOEPA?

A loan is covered by HOEPA if (1) the Annual Percentage Rate (APR) exceeds the rate for Treasury securities with a comparable maturity by more than ten percentage points, or (2) the points and fees paid by the consumer exceed the greater of eight percent of the loan amount or $480 (for 2002, adjusted annually based on …

What is the HOEPA rule?

The 2013 HOEPA Rule requires that lenders provide applicants for federally-related mortgage loans with a written list of homeownership counseling organizations within three business days after the lender receives the application.

What disclosures are required by HOEPA?

Disclosure Requirements for HOEPA

  • The APR documentation.
  • Regular payable amount (including balloon payments)
  • Total loan amount.
  • If a variable loan, then lender must disclose the exact rate and monthly payments.
  • Maximum monthly payments.