Expanded Protections for High Cost Mortgages

New federal rules, which went into effect on January 10, 2014, have expanded the protections under the Homeownership and Equity Protection Act (HOEPA). Since 1994, HOEPA has provided protections to people taking out certain high cost refinance loans and closed-end home equity loans (in general, high costs means high interest rates and fees). Those protections include additional disclosures, a prohibition on certain loan terms, and restrictions on certain fees, among other things.

In 2010, the Dodd-Frank Act significantly expanded the HOEPA protections by making them applicable to purchase-money mortgage loans (those you take out when you buy a home) and open-end credit lines, like HELOCs. The Act also increased the requirements for pre-mortgage homeownership counseling. The Consumer Financial Protection Bureau (CFPB) issued rules implementing these changes, which became effective January 10, 2014.

To learn what qualifies as a high cost loan under HOEPA, what protections HOEPA provices for borrowers, and details on the new CFPB HOEPA rules, see Nolo's article New Protections for High Cost Mortgages.