What is the Home Ownership and Equity Protection Act?

The Home Ownership and Equity Protection Act (HOEPA) is a federal law that applies to the state of Kansas and protects home-owners on certain types of loans. HOEPA was enacted in 1994 in order to protect consumers from exploitative lenders who offer home-equity loans or refinancing at very high interest rates and fees. Under the act, lenders must follow certain guidelines when offering loans, which include providing clear and conspicuous disclosures to the consumer, limiting fees, and imposing loan limits. HOEPA also regulates loan terms and conditions, such as allowing the borrower to prepay the loan without being penalized, and restricting certain types of lender activities that may lead to a default, such as "flipping" whereby the lender refinances the loan multiple times. HOEPA is administered by the Consumer Financial Protection Bureau and enforced by the Federal Trade Commission and state attorneys general. The act is designed to protect consumers from deceptive practices and to ensure that borrowers understand the risks and costs associated with these loans. It has been successful in protecting consumers from unscrupulous lenders in Kansas.

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What is the Home Ownership and Equity Protection Act?

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