Under HOEPA, which of the following practices is prohibited on high-cost mortgages?
Correct Answer
C) Including a prepayment penalty clause
HOEPA prohibits prepayment penalties on high-cost mortgages. The law aims to protect borrowers from predatory lending practices, and prepayment penalties can trap borrowers in expensive loans.
Why This Is the Correct Answer
HOEPA prohibits prepayment penalties on high-cost mortgages. The law aims to protect borrowers from predatory lending practices, and prepayment penalties can trap borrowers in expensive loans.
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?
A lender originates a mortgage that meets all QM requirements. Three years later, the borrower defaults and claims the lender violated the ATR rule. What legal protection does the lender have?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
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A lender's website advertisement states 'ARM loans with initial rates as low as 2.75% APR, adjusting annually after the first year.' What additional disclosure is required under TILA advertising rules?
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