Which type of mortgage is considered a "high-cost mortgage" according to HOEPA?

A "high-cost mortgage" as defined by the Home Ownership and Equity Protection Act (HOEPA) is one that exceeds certain thresholds for annual percentage rates (APRs) or total points and fees. This designation is significant as it triggers additional disclosures and protections for borrowers, aiming to prevent predatory lending practices and ensure that consumers are well-informed about the risks associated with these loans.

The criteria for identifying a high-cost mortgage center on the costs and interest rates associated with the loan. If the APR exceeds a specified percentage over the applicable Treasury securities yield, or if the total points and fees surpass a certain threshold based on the loan amount, the loan is classified as high-cost. This classification serves as a regulatory safeguard, ensuring that borrowers understand the terms and costs before proceeding with the mortgage agreement.

Regarding the other options, mortgages with low-interest rates, government-backed mortgages, and conventional mortgages do not inherently meet the high-cost threshold established by HOEPA unless they also exceed the defined APR or points and fees limits. These categories can encompass a wide range of loan types that may or may not be considered high-cost, depending primarily on their specific financial terms.