Federal Law Violations

High Risk Home Loan Act

This statute was passed to attack the problem of predatory lending.

Federal Law Violations

Some Of Its Provisions:

Sec. 15 Ability to repay: Lender must believe borrower can repay (presumed affordable if debt-to-income ratio below 50%).

Sec. 20 Verification of ability to repay loan: Lender must document ability to repay.

Sec. 30 Prepayment penalty: PPP limited to 3% of the total loan amount in the first year, 2% in the second, 1% in the third, 0% thereafter.     

Sec. 55 Financing of points and fees: No financed points and fees in excess of 6% of the total loan amount.     

Sec. 95 Disclosure prior to making a high risk home loan: Advance cautionary notice of high-risk status of loan.

Sec. 100 Counseling prior to perfecting foreclosure proceedings: Required notice of counseling opportunity if loan in default more than 30 days.

Sec. 110 Mortgage Awareness Program: Required notice of (waivable) opportunity for borrower to attend OBRE/DFI-sponsored counseling program before executing high risk home loan.

Violation of any of the above renders term unenforceable and gives private right of action (with actual, punitive, and equitable relief).

Unlimited to Defend or Stop foreclosure.