A high-cost mortgage is a mortgage used to purchase a home, a home equity loan (or second mortgage or refinance ), or a HELOC that : is secured by your primary residence and whose annual percentage rate or APR ( or the points and charges applied) exceed certain limit amounts linked to market conditions. If you have a high-cost mortgage, you may have additional rights under a federal law called the Homeownership Protection and Foreclosure Act (HOEPA), and the CFPB has more information about your special rights .
If instead you have a higher-priced mortgage with an APR higher than the benchmark rate called the Average Prime Offer Rate (the interest rate charged to borrowers with the best credit), you may have additional rights. You may have these rights if your higher-priced mortgage is used to buy a home, for a home equity loan, a second mortgage, or a refinance secured by your primary residence. These additional protections do not apply to Home Equity Lines of Credit or HELOCs . If you have a higher priced mortgage loan, the Consumer Financial Protection Bureau (CFPB) has more information about your rights .
If you take out a loan from a dishonest lender, you could lose your home and your money. Certain lenders target elderly, moderate-income, or credit-challenged homeowners and then try to take advantage of them using deceptive, unfair, or other illegal practices such as the following.
Harmful practices may also be found in the day-to-day servicing of your mortgage payments. There are several types of loan servicing abuse, for example, when the lender charges you incorrectly or fails to provide you with a complete and accurate account statement or itemize your payment amounts. Learn more about your rights when paying your mortgage payments.
Some of these harmful home equity lending practices violate federal credit laws related to disclosures about loan terms; debt collection and discrimination based on age, gender, marital status, race or nationality . You may also have additional rights under state law that may allow you to sue.
If you think your provider broke the law, you may want to contact the provider or servicer to tell them. At the same time, you may wish to contact an attorney.
You can also report fraud to: