What is the primary goal of the Home Ownership and Equity Protection Act (HOEPA)?

The primary goal of the Home Ownership and Equity Protection Act (HOEPA) is to protect consumers against predatory lending practices. HOEPA was enacted in response to concerns about abusive lending practices, particularly in the subprime mortgage market. It establishes specific requirements and protections for high-cost mortgages, aimed at ensuring that consumers are fully informed about the terms and conditions of their loans and that they are treated fairly by lenders.

This includes mandatory disclosures, restrictions on certain fees, and guidelines for the loan terms that can be offered to borrowers. By addressing these predatory practices, HOEPA seeks to safeguard consumers from loans that may result in excessive costs, misleading terms, or other harmful conditions that could lead to foreclosure. This focus on consumer protection differentiates HOEPA from initiatives aimed solely at promoting homeownership or regulating interest rates, as its primary emphasis is on fair lending practices and borrower rights.