What is the Homeowner’s Protection Act?

The Homeowner’s Protection Act (HPA) is Virginia’s law that protects homeowners from unfair or abusive practices by lenders and mortgage companies. The HPA covers all residential mortgages that are made in Virginia on 1-4 family units. It applies regardless of the terms of the loan or the type of loan product. The HPA requires mortgage lenders and companies to provide borrowers with specific information regarding Private Mortgage Insurance (PMI) coverage. It also requires lenders to take specific steps to cancel PMI on a loan any time the principal balance of the loan falls below 78% of the original value of the home (or the maximum term of the loan has been reached). In addition, lenders and mortgage companies are prohibited from charging mortgage prepayment penalties if a borrower pays off a loan early. Finally, the HPA protects homeowners from predatory lending schemes. For example, the law bans lenders from providing loans with higher interest rates that the borrower would qualify for if the lender and borrower had made an honest effort to be sure the borrower could afford the loan. The goal of the HPA is to protect homeowners from unfair or abusive practices and to make sure they are treated fairly and are not taken advantage of in the mortgage market.

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What is the Homeowner’s Protection Act?

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