Which of the following is prohibited on a HOEPA-covered high-cost mortgage?
Correct Answer
B) Balloon payments within the first 5 years
HOEPA prohibits balloon payments on high-cost mortgages, except in limited circumstances. The law also prohibits prepayment penalties, most negative amortization, and increased interest rates after default.
Why This Is the Correct Answer
HOEPA prohibits balloon payments on high-cost mortgages, except in limited circumstances. The law also prohibits prepayment penalties, most negative amortization, and increased interest rates after default.
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