With APOR of 4.25% on a $200,000 loan, which APR would trigger HOEPA?

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Multiple Choice

With APOR of 4.25% on a $200,000 loan, which APR would trigger HOEPA?

Explanation:
HOEPA is triggered when the loan’s APR is sufficiently higher than the current APOR. For a first-lien mortgage, that threshold is APOR plus 6 percentage points. So with APOR at 4.25%, the trigger APR is 10.25% (4.25% + 6%). Any APR at or above 10.25% would trigger HOEPA. The option showing 11% clearly meets this requirement and would trigger HOEPA. The other options are below the threshold, so they would not.

HOEPA is triggered when the loan’s APR is sufficiently higher than the current APOR. For a first-lien mortgage, that threshold is APOR plus 6 percentage points. So with APOR at 4.25%, the trigger APR is 10.25% (4.25% + 6%). Any APR at or above 10.25% would trigger HOEPA. The option showing 11% clearly meets this requirement and would trigger HOEPA. The other options are below the threshold, so they would not.

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