What is the Home Ownership and Equity Protection Act?

The Home Ownership and Equity Protection Act (HOEPA) is a law designed to protect homeowners from predatory lending practices in the state of South Carolina. The law applies to residential mortgage loans, such as mortgages for primary residences, second homes, or investment properties. HOEPA is designed to provide safeguards to consumers who are at risk of being subject to high-cost or risky loan terms and to help preserve homeownership opportunities. Under HOEPA, a lender is prohibited from issuing loans that have certain terms that make it difficult for the borrower to repay their loan. This includes excessive balloon payments, points and fees that are more than 8% of the loan amount, and loan terms that extend more than thirty years. Additionally, lenders are prohibited from refinancing a loan without giving the borrower a net tangible benefit—meaning, the terms of the loan must improve for the borrower. Lenders must also provide disclosures to borrowers—in both writing and orally—about the risks of the loan and other important information. This will help borrowers make informed decisions. Finally, HOEPA includes reporting requirements for lenders, such as reporting to state agencies about loans they originate and maintain. This will help the state ensure lenders are adhering to the law. In summary, the Home Ownership and Equity Protection Act is a law in South Carolina designed to protect homeowners from predatory lending practices. The law sets requirements for lenders issuing high-cost loans and provides borrowers with additional protections.

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What is the Home Ownership and Equity Protection Act?

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