HOEPA is the Home Ownership and Equity Protection Act of 1994, which addresses certain deceptive and unfair trade practices in home equity lending.
The loan is covered by HOPEA if it meets the following requirements:
1) if the loan is the original mortgage on the property, if the annual percentage rate (APR) exceeds by more than eight percentage points the rates on Treasury securities of comparable maturity;
2) If the loan is a second mortgage, the APR exceeds by more than 10 percentage point the rates in Treasury securities of comparable maturity; or
3) The total fees and points payable by the consumer at or before closing exceed the larger of $583 or eight percent of the total loan amount. ($583 figure is for 2009). Credit insurance premiums for insurance written in connection with the credit transaction are counted as fees.
If a loan satisfies the requirements of HOEPA there are certain disclosures that must be given to the borrower at least three days before the loan is finalized, including disclosure of the APR, regular payment amount, and the total loan amount. Also included in the disclosure is the notice of a three day right of rescission.
HOEPA also prohibits many of the predatory lending practices that were common among High-Rate, High-Fee loans. Practices such as balloon payments that do not fully pay off the balance of the loan, default interest rates higher than pre-default rates and due-on-demand clauses are just some of the practices prohibited under HOEPA.
HOEPA gives those borrowers how have been damaged the right to sue their lenders for violation of these requirements. If successful, borrowers may actually be able to rescind their loan.
If you need help determining if a HOEPA program is a possible option for your family contact a Florida Foreclosure Lawyer or a Jacksonville Foreclosure Lawyer to review your position.
