Fed to Revise HOEPA Rule Soon

The Federal Reserve Board will meet Dec. 18 to issue long-awaited revisions to its Home Ownership and Equity Protection Act regulations that address abuses associated with subprime loans.The proposed HOEPA rule will address prepayment penalties, failure to escrow taxes and insurance, stated-income and low-documentation lending, and ability-to-repay standards. In a letter to the Fed, 17 Democrats on the Senate Banking Committee urged the Fed to act "forcefully" to protect consumers. "We appreciate the fact that the Board is moving forward with a rulemaking under HOEPA, and expect the Board to meet the duty Congress entrusted to it to end the abusive practices … that have undermined confidence in the subprime mortgage market and the economy as a whole," the Dec. 7 letter says.