Module 9: Federal Prohibition of Predatory Lending

Question 1

Define HOEPA

Answer 1

Home Ownership and Equity Protection Act

• Amendment to TILA
• Establishes disclosure requirements and prohibits deceptive and unfair practices in lending
• Enforced by FTC

Question 2

Define High-Cost Loan

Answer 2

• Must comply with HOEPA provisions
• Section 32 Loan
• Closed-end or open-end credit plan secured by a borrower’s principal residence.

Question 3

Define APOR

Answer 3

Average Prime Offer Rate

- Average APR interest rate for prime loans with similar points and terms.

Question 4

What thresholds must be met to define a High-Cost Loan

Answer 4

Any of the Following:

• First lean has APR that exceed the APOR index by more than 6.5 percentage points.
• Second mortgage APR exceed the APOR index more than 8.5% points.
• Total loan amount greater than $22,052 (border changes each year)
• Total loan is less than $22,052 but…