HOEPA Messages

The following messages appear in OnBoard to assist users with the HOEPA check.

Table 1. HOEPA Messages
Criteria	Message
The loan passes all three HOEPA tests and no prepayment information exists in new loan information.	`This is NOT considered a High Cost Loan under Reg. Z of the Federal HOEPA Law.`
The loan passes all three HOEPA tests, prepayment information exists in the new loan information, and the loan is not open end.	`This is NOT considered a High Cost Loan under Reg. Z of the Federal HOEPA Law. Prepayment is prohibited unless loan is considered a Qualified Mortgage.`
The loan passes all three HOEPA tests, prepayment information exists in the new loan information, and the loan is open end.	`This is NOT considered a High Cost Loan under Reg. Z of the Federal HOEPA Law. Prepayment penalty is restricted to 2% and can only be charged during the first 36 months of the loan. Please review core information and make any necessary changes.`
The loan fails any one of the three HOEPA tests and has financed fees	`This IS considered a High Cost Loan under Reg Z of the Federal HOEPA Law.` The following information also appears: A list of all fail tests: APR, Points & Fees, and/or Prepayment Penalty. A message stating: `The following fees were used in the Points & Fees test and cannot be financed. These fees must be changed before you can proceed.` Note A list of the financed fees appear below this message.
The loan fails any one of the three HOEPA tests and does not have financed fees	`This IS considered a High Cost Loan under Reg Z of the Federal HOEPA Law.` The following information and message also appear: A list of all fail tests: APR, Points & Fees, and/or Prepayment Penalty. The warning message: `If continuing with the loan, late fees are only permitted if the charge does not exceed 4% of the past due payment and the payment is not received 15 days after the date the payment is due. Please review core information and make any necessary changes.`
The HOEPA test fails and prepayment information exists in the new loan information	`Prepayment is prohibited if the loan is considered high cost.`
The loan is HELOC and fails any one of the three HOEPA tests	`HELOC loans cannot include a balloon payment.`
The loan fails any one of the three HOEPA tests, and the override option is not selected in Administration > Bank Information > Loans > Loan Terms	`Because this transaction failed the HOEPA test, you will need to review the HOEPA information, make any necessary changes and run the HOEPA test again.`

CAUTION

Carefully review the HOEPA and Qualified Mortgage results section in Terms. It is the user's responsibility to make any necessary changes in Core Information as it relates to the prepayment penalty and/or late charge restrictions. Failure to do so may result in discrepancies between information exported to the Core system and information printed on loan documents, as well as possible HOEPA and Qualified Mortgage violations.