Under HOEPA, what criteria distinguish a high-cost mortgage?

Under the Home Ownership and Equity Protection Act (HOEPA), a high-cost mortgage is specifically defined by criteria that focus on certain thresholds related to fees and interest rates. This designation aims to protect consumers from predatory lending practices by identifying loans that may pose a greater risk of default or foreclosure due to their unfavorable terms.

The key features that determine a high-cost mortgage under HOEPA include the annual percentage rate (APR) exceeding a specified threshold compared to a comparable rate for a prime loan and specific points and fees that exceed defined limits. These criteria ensure that borrowers are informed about the potentially harmful conditions of taking such high-cost loans.

The other options do not align with the regulations set forth by HOEPA. For example, restricting loans to only fixed rates or requiring equity in the home do not play a role in defining high-cost mortgages under this law. Likewise, loans for non-residential properties are not relevant to the criteria established for high-cost mortgages, as HOEPA is primarily concerned with loans secured by the borrower's principal dwelling.