Home Ownership and Equity Protection Act (HOEPA)

The Home Ownership and Equity Protection Act (HOEPA) is a federal law designed to protect consumers from abusive lending practices in certain high-cost home loans. Enacted in 1994, it requires lenders to provide clear disclosures about loan terms and costs, ensuring borrowers understand potential risks. It also imposes restrictions on certain loan features, such as prepayment penalties or balloon payments, to prevent borrowers from falling into deeper debt. HOEPA aims to promote transparency and fairness in the lending process, helping consumers make informed decisions about their home financing options.