Home Owners Equity Protection Act (HOEPA)
The Home Owners Equity Protection Act (HOEPA) is a federal law that was enacted in 1994 to protect homeowners from predatory lending practices. The law was designed to protect consumers from high-cost loans, such as those with high interest rates, excessive fees, and other terms that are not in the best interest of the borrower. HOEPA applies to certain types of loans, such as home equity loans, reverse mortgages, and refinancing loans. The law requires lenders to provide borrowers with certain disclosures and to limit certain fees and charges.
History of HOEPA
HOEPA was enacted in 1994 in response to the growing problem of predatory lending practices. Predatory lenders were taking advantage of vulnerable homeowners by offering them high-cost loans with excessive fees and other terms that were not in the best interest of the borrower. HOEPA was designed to protect consumers from these practices by requiring lenders to provide certain disclosures and to limit certain fees and charges.
Comparison Table
| Type of Loan | Interest Rate | Fees |
|---|---|---|
| Home Equity Loan | 8% | $500 |
| Reverse Mortgage | 10% | $1,000 |
| Refinancing Loan | 6% | $250 |
Summary
The Home Owners Equity Protection Act (HOEPA) is a federal law that was enacted in 1994 to protect homeowners from predatory lending practices. The law requires lenders to provide borrowers with certain disclosures and to limit certain fees and charges. For more information about HOEPA, you can visit the Consumer Financial Protection Bureau website or the Federal Trade Commission website.
See Also
- Truth in Lending Act
- Real Estate Settlement Procedures Act
- Fair Credit Reporting Act
- Fair Debt Collection Practices Act
- Fair Credit Billing Act
- Equal Credit Opportunity Act
- Consumer Leasing Act
- Consumer Credit Protection Act
- Fair Credit Extension Uniformity Act
- Fair and Accurate Credit Transactions Act
