A borrower is obtaining a $150,000 first-lien mortgage. The total points and fees are $8,500. Is this loan subject to HOEPA protections?
Correct Answer
A) Yes, because the points and fees exceed 5% of the loan amount
Under HOEPA, a mortgage is high-cost if points and fees exceed 5% of the total loan amount for loans of $22,969 or more (2024 threshold). $8,500 ÷ $150,000 = 5.67%, which exceeds the 5% threshold.
Why This Is the Correct Answer
Under HOEPA, a mortgage is high-cost if points and fees exceed 5% of the total loan amount for loans of $22,969 or more (2024 threshold). $8,500 ÷ $150,000 = 5.67%, which exceeds the 5% threshold.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which information is NOT required to be included in an AfBA disclosure?
A lender quotes an APR of 4.25% on a mortgage loan, but the actual APR calculation results in 4.28%. Under TILA's APR accuracy tolerance, is this disclosure compliant?
Which of the following fees would NOT be included in the finance charge calculation under TILA?
For a purchase money mortgage with a loan amount of $400,000, which of the following represents the correct method for calculating the APR?
A servicer receives a borrower's written request for payoff information on Monday. The borrower needs the information for a refinance closing scheduled for the following Friday. When must the servicer provide an accurate payoff statement?
A lender provides a borrower with initial TILA disclosures showing an APR of 4.5%. Due to market changes, the final APR at closing is 4.625%. What disclosure requirement applies?
People Also Study
General Mortgage Knowledge
23% of exam
Mortgage Loan Origination Activities
25% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Related Study Resources
Previous Question
A reservist is called to active duty for 6 months starting next month. They have an existing mortgage with a 7.5% interest rate that was originated 2 years ago. When can they request the SCRA interest rate reduction?
Next Question
Which document is used to determine whether a property is located in a Special Flood Hazard Area?