Under HOEPA, which statement about prepayment penalties on high-cost mortgages is correct?
Correct Answer
A) Prepayment penalties are prohibited for the entire loan term
HOEPA completely prohibits prepayment penalties on high-cost mortgages for the entire term of the loan. There are no exceptions based on loan type, disclosure, or time period.
Why This Is the Correct Answer
HOEPA completely prohibits prepayment penalties on high-cost mortgages for the entire term of the loan. There are no exceptions based on loan type, disclosure, or time period.
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A small creditor originates a balloon mortgage that meets all other QM requirements. The balloon payment is due after 7 years, and the creditor holds the loan in portfolio. Can this loan qualify as a QM?
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On a $300,000 loan, the lender charged $2,100 for appraisal and credit report fees when the Loan Estimate showed $2,000. The borrower also paid $150 for a required pest inspection not disclosed on the Loan Estimate. What is the total tolerance violation?