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HOEPA would not apply to:

a: A bridge loan to finance construction
b: A purchase money mortgage loan
c: A closed-end home equity loan
d: An adjustable-rate mortgage loan

User Rayimag
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1 Answer

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Final answer:

HOEPA would not apply to a bridge loan to finance construction. Bridge loans are exempt from HOEPA regulations as they are short-term loans for construction, unlike the other options which can fall under HOEPA depending on their terms.

Step-by-step explanation:

The Home Ownership and Equity Protection Act (HOEPA) is designed to offer protections to homeowners by regulating high-cost loans. This set of regulations would generally apply to certain high-interest loans and mortgages, but there are specific exclusions.

Among the choices provided, HOEPA would not apply to a bridge loan to finance construction (option a). Bridge loans are short-term loans that are intended to cover the immediate costs of construction and are typically replaced by a long-term financing solution once the construction is complete. As these are not intended for long-term financing and typically do not involve the same levels of consumer risk as other high-interest loans, they are excluded from HOEPA regulations.

On the other hand, options b (a purchase money mortgage loan), c (a closed-end home equity loan), and d (an adjustable-rate mortgage loan) can, depending on their terms and the circumstances surrounding their origination, fall under the purview of HOEPA regulations.

User Madi
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