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.
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