HOEPA triggers are based on which of the following?

• A. APR or points/fees thresholds, extra disclosures + restrictions
• B. Credit score thresholds
• C. Loan-to-value ratio
• D. Late payment history

Answer: (A)

HOEPA triggers hinge on how costly the loan is. A loan becomes a HOEPA high-cost mortgage when its price is too high either because the APR sits well above the benchmark APOR (a set margin above market rates) or because the total points and fees at closing exceed a certain portion of the loan amount. When either trigger is met, the loan is subject to HOEPA protections, which require extra disclosures and impose additional restrictions on the loan terms. Underwriting factors like credit score, loan-to-value, or past late payments aren’t what HOEPA uses to trigger protections, even though they matter in general lending. So the correct choice points to APR or points/fees thresholds with the corresponding disclosures and restrictions.