What is the Home Ownership and Equity Protection Act?

The Home Ownership and Equity Protection Act (HOEPA) is a federal law that was enacted in 1994 to address issues of predatory lending practices in the home mortgage market. HOEPA was enacted in response to the predatory mortgage market of the early 1990s, when lenders charged high up-front fees, adjustable interest rate mortgages, and other expensive fees for mortgage loans. HOEPA is designed to protect consumers from predatory lending practices by imposing certain restrictions on lenders. HOEPA requires lenders to provide consumers with clear disclosure of the terms of their home loan. This includes clear disclosure of loan fees, points, and other costs. HOEPA also requires lenders to provide borrowers with a "good faith estimate" of loan costs and other fees. The law also imposes restrictions on the amount of up-front loan points and fees that lenders may charge. HOEPA also contains other important protections for consumers. It limits the amount of points and fees that lenders can charge, requires lenders to provide prepayment penalties if the loan is paid off early, and limits the amount of late payments and other charges for delinquent borrowers. In California, HOEPA is enforced by the Department of Business Oversight (DBO). The DBO is the state agency responsible for overseeing lending practices and ensuring compliance with HOEPA and other lending laws. Consumers can file complaints regarding possible violations of HOEPA with the DBO. All complaints are investigated, and if a violation is found, the DBO takes appropriate action against the lender.

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What is the Home Ownership and Equity Protection Act?

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