The Home Ownership and Equity Protection Act

The Home Ownership and Equity Protection Act (HOEPA) is a U.S. federal law aimed at protecting consumers from abusive lending practices, particularly in high-cost mortgages. Enacted in 1994, it requires lenders to provide clear disclosures about loan terms and fees, and it imposes restrictions on certain practices, such as balloon payments and prepayment penalties. HOEPA focuses on ensuring that borrowers understand the risks of high-interest loans and that they are treated fairly, helping to prevent predatory lending and promoting responsible homeownership.