For a $20,000 subordinate lien mortgage, what is the maximum points and fees allowed before the loan becomes subject to HOEPA?
Correct Answer
B) $1,148
For loans under the current threshold amount ($22,969 in 2024), the points and fees trigger is the lesser of 8% of the loan amount or a fixed dollar amount ($1,148 in 2024). Since 8% of $20,000 = $1,600, the $1,148 fixed amount applies.
Why This Is the Correct Answer
For loans under the current threshold amount ($22,969 in 2024), the points and fees trigger is the lesser of 8% of the loan amount or a fixed dollar amount ($1,148 in 2024). Since 8% of $20,000 = $1,600, the $1,148 fixed amount applies.
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