Before selling high-cost mortgages, what must MaxMortgage provide to purchasers?

Before selling high-cost mortgages, what must MaxMortgage provide to purchasers?

• A. A notice that the loans are subject to HOEPA
• B. A guarantee that there will be no HOEPA violations
• C. All pertinent borrower documentation
• D. A summary of the terms of the loans

Answer: (A)

MaxMortgage is required to provide purchasers with a notice that the loans are subject to the Home Ownership and Equity Protection Act (HOEPA) before selling high-cost mortgages. This act was established to protect consumers from predatory lending practices and requires specific disclosures for high-cost loans, ensuring transparency in lending. By informing purchasers that the loans fall under HOEPA, MaxMortgage highlights the applicable regulations and the protective measures in place for borrowers. This notice serves to ensure that all parties involved are aware of the legal framework surrounding high-cost mortgages and the heightened scrutiny that such loans must undergo to protect borrowers from potential exploitation. Advertisers, brokers, and lenders must maintain compliance with HOEPA rules, and the requirement of this notice plays a crucial role in achieving that compliance by facilitating informed decision-making regarding the purchase and origination of high-cost mortgages.

MaxMortgage is required to provide purchasers with a notice that the loans are subject to the Home Ownership and Equity Protection Act (HOEPA) before selling high-cost mortgages. This act was established to protect consumers from predatory lending practices and requires specific disclosures for high-cost loans, ensuring transparency in lending.

By informing purchasers that the loans fall under HOEPA, MaxMortgage highlights the applicable regulations and the protective measures in place for borrowers. This notice serves to ensure that all parties involved are aware of the legal framework surrounding high-cost mortgages and the heightened scrutiny that such loans must undergo to protect borrowers from potential exploitation.

Advertisers, brokers, and lenders must maintain compliance with HOEPA rules, and the requirement of this notice plays a crucial role in achieving that compliance by facilitating informed decision-making regarding the purchase and origination of high-cost mortgages.