Florida Foreclosure Defense Lawyer Question: What is the Home Ownership and Equity Protection Act
The Home Ownership and Equity Protection Act, commonly known as HOEPA, is a section within the Truth In Lending Act (TILA) that requires additional rules when a home refinance loan is considered high cost. A refinance loan is considered high cost if the initial home loan amount was below $120,000, or if the interest rate was above 10% at closing. Additionally, there may be a HOEPA violation where credit life insurance was sold as part of the loan transaction.
In addition to the disclosures required by TILA, the following additional disclosures are required when the loan is subject to HOEPA: "You are not required to complete this agreement merely because you have received these disclosures or have signed a loan application." "If you obtain this loan, the lender will have a mortgage on you home. You cold lose you home, and any money you have put into it, if you do not meet your obligations under the loan." These additional disclosures must also be provided THREE DAYS before closing along with the Annual Percentage Rate: In the case of a credit transaction with a fixed rate of interest, the annual percentage rate and the amount of the regular monthly payment; or In the case of any other credit transaction, the annual percentage rate of the loan, the amount of the regular monthly payment, a statement that the interest rate and monthly payment may increase, and the amount of the maximum monthly payment, based on the maximum interest rate allowed pursuant to section 3806 of title 12.
HOEPA allows the borrower to rescind the mortgage transaction up to 3-years after the closing of the loan if used as a defense to a foreclosure action (1-year if brought as an independent action outside of foreclosure), and was a refinance transaction of the borrower's principal residence. If the loan is subject to HOEPA and the lender did not provide the required notices 3 days before closing, then rescission of the loan may be available and all of the following MAY come into affect:
• A right to immediately rescind the transaction,
• A refund of all principal and interest payment made to the lender,
• A refund of all closing costs paid at the time of closing,
• A refund of any down payment made in connection with the loan,
• Termination of the mortgage,
• Keep the property if it is already paid off, and
Possible statutory damages in an amount equal to the sum of:
• Any actual damage sustained by such a person as a result of the failure to comply;
• Not less than $200 or greater than $2,000 if the home loan is not a home equity loan;
• Costs of the action, together with reasonable attorney's fees; and
• An amount equal to the sum of all finance charges and fees paid by the consumer, unless the creditor demonstrates the failure to comply is not material. An assignee of the mortgage is liable for all claims that could be brought against the original lender.
If you are facing a Florida Foreclosure Lawsuit, especially if your loan was a "high cost" loan, contact a Florida Foreclosure Defense Lawyer or a Jacksonville Foreclosure Defense Lawyer today for a free consultation to see what potential foreclosure defenses , including potential HOEPA violations, are available to you.
A new cooperative study from state attorneys general and lending insiders from across the country has found that greater than 60% of homeowners who are seriously delinquent on their mortgage payments are not involved in any foreclosure alternative with their lender. On its face this news is disturbing, but coupled with the other findings of the study, that loan modifications are leading to few re-defaults, shows just how misplaced many lenders focus is.
