A loan that exceeds the HOEPA thresholds for APR and points and fees is considered what type of loan?

A loan that exceeds the Home Ownership and Equity Protection Act (HOEPA) thresholds for annual percentage rates (APR) and points and fees is classified as a High Cost Loan. The HOEPA regulations are designed to protect consumers from predatory lending practices by establishing specific criteria that loans must meet in terms of cost and terms. When a loan surpasses the defined thresholds for fees and interest rates, it is categorized as high cost, triggering additional consumer protections and disclosures that are not applicable to standard loans.

The classification as a High Cost Loan indicates that the borrower may face greater risks associated with the loan, which can include higher fees and less favorable terms. This classification necessitates that lenders provide a more extensive set of disclosures to borrowers, ensuring that they are fully informed about the conditions and costs associated with the loan.

Understanding this classification is crucial for mortgage loan officers, as it affects compliance with regulations and the responsibility lenders have to ensure borrowers are treated fairly.