What are considered "high-cost mortgages" according to HOEPA?

"High-cost mortgages," as defined by the Home Ownership and Equity Protection Act (HOEPA), are specifically those that have rates or fees exceeding certain specified thresholds. This distinction is crucial as it aims to protect consumers from predatory lending practices. The thresholds include certain annual percentage rates (APR) and points and fees that, if exceeded, categorize the loan as high-cost.

High-cost mortgages are subject to specific disclosures and protections, which are designed to ensure borrowers are well-informed about the costs and risks associated with high-cost loans. Understanding the criteria for high-cost mortgages is essential for mortgage loan originators, as it helps them navigate compliance with federal regulations and safeguard consumers against potentially exploitative lending practices.

The other options do not align with the definition of high-cost mortgages set forth in HOEPA. For instance, low income requirements do not inherently affect the classification of a mortgage as high-cost. Similarly, the absence of documentation requirements and the classification of loans for investment properties are unrelated to the criteria established for high-cost mortgages under HOEPA. This underscores the specific nature of the correct answer and the importance of comprehension in this area.