Final answer:
A loan of $15,000 is subject to Section 32 requirements if points and fees at or before closing exceed 5% of the total loan amount. (option D)
Step-by-step explanation:
A loan of $15,000 becomes subject to Section 32 requirements if the points and fees payable by the borrower at or before closing exceed 5% of the total loan amount. Therefore, the correct answer is D) 5% of the total loan amount.
When considering taking out a mortgage or any other type of loan, it's essential to understand the associated costs and fees. Points and fees can include loan origination fees, points purchased to lower the interest rate, appraisal fees, credit report fees, and other charges that the borrower is required to pay at or before loan closing. For a loan of $15,000 or more, the Home Ownership and Equity Protection Act (HOEPA), under Section 32, puts forth certain requirements to protect borrowers from potentially predatory lending practices. These requirements come into play when the total points and fees exceed a designated percentage of the loan amount.
It is important to note that usury laws may impose a maximum limit on interest rates that lenders can charge, which can also impact the dynamics of loans and the mortgage market.