The Homeownership Equity Protection Act under Regulation Z of the Truth-in Lending-Act forces creditors to comply with certain guidelines and disclosure requirements when a loan is tied to certain types of home purchases.
But there are exemptions for loans that meet certain requirements, and the CFPB revised some of the threshold requirements that have to be met for HOEPA guidelines to apply this week.
HOEPA rules previously applied to loans backed by homes when the total points and fees paid by the customer at or before loan consummation were greater than $400 or 8% of the total loan amount, the CFPB explained. In such a case, additional HOEPA protections for borrowers would apply.
However, the CFPB as part of a series of threshold changes on lending provisions noted this week that the bureau is adjusting the $400-threshold to $625 based on the annual percentage change in the consumer price index.
The rule takes effect on Jan. 1, 2013.
Click here to read about any changes that apply to HOEPA requirements and other lending provision changes.
