Under HOEPA, which of the following practices is prohibited on high-cost mortgages?
Correct Answer
A) 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?
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?
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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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