15 U.S.C. §1639 — Requirements for certain mortgages (HOEPA)

tila-12usc-1639

TILA statutory HOEPA section (high-cost mortgage). Sets the special pre-consummation disclosure, prepayment-penalty ban, balloon ban, negative-amortization ban, no-pattern-or-practice of disregard for ability-to-pay, home-improvement-payment routing, no-recommended-default, and late-fee limits for high-cost mortgages. Implemented in Regulation Z at 12 CFR §1026.32 (coverage/disclosures) and §1026.34 (prohibited acts).

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source:
  type: regulation
  id: tila-12usc-1639
  authority: 15 U.S.C. §1639 — Requirements for certain mortgages (HOEPA)
  description: |
    TILA statutory HOEPA section (high-cost mortgage). Sets the
    special pre-consummation disclosure, prepayment-penalty ban,
    balloon ban, negative-amortization ban, no-pattern-or-practice
    of disregard for ability-to-pay, home-improvement-payment
    routing, no-recommended-default, and late-fee limits for
    high-cost mortgages. Implemented in Regulation Z at 12 CFR
    §1026.32 (coverage/disclosures) and §1026.34 (prohibited acts).
obligations:
  - id: tila-15usc-1639-b1-three-day-pre-consummation-disclosure
    canonical_id: tila-15usc-1639-b1-three-day-pre-consummation-disclosure
    section: 15 U.S.C. §1639(b)(1) — High-cost mortgage 3-business-day pre-consummation disclosure
    description: |
      [LENDER], for any high-cost mortgage (a §1602(aa) mortgage as
      implemented at 12 CFR §1026.32), must provide the §1639(a)
      special disclosures (including the "you are not required to
      complete this agreement" and "you could lose your home"
      language, APR, and regular payment information) not less than
      3 business days prior to consummation of the transaction.
    type: do
    audit_question: For every high-cost mortgage [LENDER] originates, can [LENDER] evidence delivery of the §1639(a) HOEPA disclosures at least 3 business days prior to consummation, and that no changes to credit terms after delivery rendered the disclosures inaccurate without re-issuance under §1639(b)(2)?
    program_review: Do the P&Ps ensure the §1639(a) HOEPA special disclosures (the not-required-to-complete / could-lose-home language, APR, and regular-payment information) are provided at least 3 business days before consummation of every high-cost (§1602(aa) / 12 CFR §1026.32) mortgage, with re-issuance under §1639(b)(2) where post-delivery credit-term changes rendered them inaccurate?
    file_review: Pull high-cost-mortgage files; confirm the §1639(a) disclosures landed at least 3 business days before consummation and that any inaccuracy-inducing change triggered re-issuance.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: loan_officer
    secondary_owner_role: compliance_officer
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - hoepa
      - 3-day
      - disclosure
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639(b)(1)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639
      snapshot_id: f472cb3e49e3918a
      fetched_at: '2026-05-22T18:51:51Z'
      content_hash: sha256:2eccdfa1c5f7d0d0dd9f921ded166d3361212e0ef57c9fe3009cd17ce198c4f5
      paragraph_quote: The disclosures required by this section shall be given not less than 3 business days prior to consummation of the transaction.
      drafter_attestation: |
        Copied verbatim from snapshot f472cb3e49e3918a (content.txt) at
        2026-05-22T19:00Z. Substring is the full §1639(b)(1) operative
        3-business-day timing rule.
    promoted_at: '2026-05-22T19:04:27+00:00'
    promoted_from: tila-12usc-1639-roundb-v1.yaml
  - id: tila-15usc-1639-c1a-no-prepayment-penalty-on-hoepa
    canonical_id: tila-15usc-1639-c1a-no-prepayment-penalty-on-hoepa
    section: 15 U.S.C. §1639(c)(1)(A) — No prepayment penalty on HOEPA loans
    description: |
      A high-cost mortgage may not contain terms under which a
      consumer must pay a prepayment penalty for paying all or part
      of the principal before the date on which the principal is due.
      [LENDER] may not include any prepayment-penalty term in the
      note or any related instrument on a HOEPA loan.
    type: dont
    audit_question: For every high-cost mortgage [LENDER] originates, can [LENDER] evidence that the note and all related instruments contain no prepayment-penalty term?
    program_review: Do the P&Ps ensure no high-cost mortgage's note or related instrument contains any prepayment-penalty term?
    file_review: Pull high-cost-mortgage files; confirm the note and related instruments contain no prepayment-penalty term.
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: loan_officer
    secondary_owner_role: compliance_officer
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - hoepa
      - prepayment-penalty
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639(c)(1)(A)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639
      snapshot_id: f472cb3e49e3918a
      fetched_at: '2026-05-22T18:51:51Z'
      content_hash: sha256:2eccdfa1c5f7d0d0dd9f921ded166d3361212e0ef57c9fe3009cd17ce198c4f5
      paragraph_quote: A mortgage referred to in section 1602(aa)   1 of this title may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal before the date on which the principal is due.
      drafter_attestation: |
        Copied verbatim from snapshot f472cb3e49e3918a (content.txt) at
        2026-05-22T19:00Z. Substring is the full §1639(c)(1)(A)
        operative prepayment-penalty prohibition.
    promoted_at: '2026-05-22T19:04:27+00:00'
    promoted_from: tila-12usc-1639-roundb-v1.yaml
  - id: tila-15usc-1639-e-no-balloon-payment
    canonical_id: tila-15usc-1639-e-no-balloon-payment
    section: 15 U.S.C. §1639(e) — No balloon payment on HOEPA loans
    description: |
      No high-cost mortgage may contain a scheduled payment that is
      more than twice as large as the average of earlier scheduled
      payments. The prohibition does not apply when the payment
      schedule is adjusted to the seasonal or irregular income of the
      consumer.
    type: dont
    audit_question: For every high-cost mortgage [LENDER] originates, can [LENDER] evidence that no scheduled payment exceeds twice the average of earlier scheduled payments (or that the seasonal/irregular-income exception under §1639(e) is documented and applicable)?
    program_review: Does the overall program account for the HOEPA balloon prohibition and its exception — preventing any scheduled payment more than twice the average of earlier scheduled payments, except where the payment schedule is adjusted to the consumer's seasonal or irregular income?
    file_review: Pull high-cost-mortgage files; confirm no scheduled payment exceeds twice the average of earlier payments (or that the seasonal/irregular-income exception is documented and applicable).
    judgment: false
    feeds: []
    workflow_phase: origination
    owner_role: loan_officer
    secondary_owner_role: compliance_officer
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - hoepa
      - balloon
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639(e)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639
      snapshot_id: f472cb3e49e3918a
      fetched_at: '2026-05-22T18:51:51Z'
      content_hash: sha256:2eccdfa1c5f7d0d0dd9f921ded166d3361212e0ef57c9fe3009cd17ce198c4f5
      paragraph_quote: No high-cost mortgage may contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This subsection shall not apply when the payment schedule is adjusted to the seasonal or irregular income of the consumer.
      drafter_attestation: |
        Copied verbatim from snapshot f472cb3e49e3918a (content.txt) at
        2026-05-22T19:00Z. Substring is the full §1639(e) operative
        balloon-payment prohibition with seasonal-income exception.
    promoted_at: '2026-05-22T19:04:27+00:00'
    promoted_from: tila-12usc-1639-roundb-v1.yaml
  - id: tila-15usc-1639-h-no-pattern-of-extending-without-repayment-ability
    canonical_id: tila-15usc-1639-h-no-pattern-of-extending-without-repayment-ability
    section: 15 U.S.C. §1639(h) — No pattern or practice of HOEPA lending without regard to repayment ability
    description: |
      [LENDER] shall not engage in a pattern or practice of extending
      credit to consumers under high-cost mortgages based on the
      consumers' collateral without regard to the consumers'
      repayment ability, including the consumers' current and
      expected income, current obligations, and employment.
    type: dont
    audit_question: Does [LENDER]'s HOEPA-loan underwriting policy require a documented repayment-ability determination for every high-cost mortgage (current and expected income, current obligations, employment) such that no §1639(h) pattern-or-practice of collateral-only lending can be inferred from [LENDER]'s book?
    program_review: Do the P&Ps require a documented repayment-ability determination (current and expected income, current obligations, employment) for every high-cost mortgage, such that no §1639(h) pattern-or-practice of collateral-only lending can be inferred from the lender's book?
    file_review: Review the HOEPA-loan book and underwriting files; the compliance person judges whether the loans reflect repayment-ability determinations or a pattern of collateral-only lending.
    judgment: true
    feeds: []
    workflow_phase: origination
    owner_role: compliance_officer
    secondary_owner_role: ''
    cadence: continuous
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - hoepa
      - repayment-ability
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639(h)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639
      snapshot_id: f472cb3e49e3918a
      fetched_at: '2026-05-22T18:51:51Z'
      content_hash: sha256:2eccdfa1c5f7d0d0dd9f921ded166d3361212e0ef57c9fe3009cd17ce198c4f5
      paragraph_quote: A creditor shall not engage in a pattern or practice of extending credit to consumers under mortgages referred to in section 1602(aa)   1 of this title based on the consumers’ collateral without regard to the consumers’ repayment ability, including the consumers’ current and expected income, current obligations, and employment.
      drafter_attestation: |
        Copied verbatim from snapshot f472cb3e49e3918a (content.txt) at
        2026-05-22T19:00Z. Substring is the full §1639(h) operative
        pattern-or-practice prohibition.
    promoted_at: '2026-05-22T19:04:27+00:00'
    promoted_from: tila-12usc-1639-roundb-v1.yaml
  - id: tila-15usc-1639-j-no-recommended-default
    canonical_id: tila-15usc-1639-j-no-recommended-default
    section: 15 U.S.C. §1639(j) — No recommended default
    description: |
      No creditor shall recommend or encourage default on an existing
      loan or other debt prior to and in connection with the closing
      or planned closing of a high-cost mortgage that refinances all
      or any portion of such existing loan or debt.
    type: dont
    audit_question: For every high-cost mortgage refinance [LENDER] originates, does [LENDER]'s loan-officer training and call/email-review process confirm that no LO recommended or encouraged default on the existing loan or other debt in connection with the planned closing?
    program_review: Do the P&Ps (LO training, call/email review) ensure no creditor recommends or encourages default on an existing loan or debt prior to and in connection with the closing or planned closing of a high-cost mortgage that refinances all or part of that debt?
    file_review: Review LO training and call/email-review records for high-cost refis; the compliance person judges whether any LO recommended or encouraged default on the existing debt.
    judgment: true
    feeds: []
    workflow_phase: origination
    owner_role: loan_officer
    secondary_owner_role: compliance_officer
    cadence: per-loan
    consequence: ''
    tags:
      - round-b
      - regulator-direct
      - tila
      - hoepa
      - recommended-default
      - origination
      - promoted
    primary_source:
      tier: 1
      authority: 15 U.S.C. §1639(j)
      source_class: tila-statute
      source_url: https://www.law.cornell.edu/uscode/text/15/1639
      snapshot_id: f472cb3e49e3918a
      fetched_at: '2026-05-22T18:51:51Z'
      content_hash: sha256:2eccdfa1c5f7d0d0dd9f921ded166d3361212e0ef57c9fe3009cd17ce198c4f5
      paragraph_quote: No creditor shall recommend or encourage default on an existing loan or other debt prior to and in connection with the closing or planned closing of a high-cost mortgage that refinances all or any portion of such existing loan or debt.
      drafter_attestation: |
        Copied verbatim from snapshot f472cb3e49e3918a (content.txt) at
        2026-05-22T19:00Z. Substring is the full §1639(j) operative
        recommended-default prohibition.
    promoted_at: '2026-05-22T19:04:27+00:00'
    promoted_from: tila-12usc-1639-roundb-v1.yaml
_promotion_history:
  - promoted_at: '2026-05-22T19:04:27+00:00'
    candidate_path: obligations\_remediation\_round_b_drafts\tila-12usc-1639-roundb-v1.yaml
    candidates_promoted: 5
    candidates_skipped_existing: 0

Verbatim regulatory text (5)

Verbatim provisions from 15 U.S.C. §1639 — Requirements for certain mortgages (HOEPA) — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.

15 U.S.C. §1639(b)(1) — High-cost mortgage 3-business-day pre-consummation disclosure

The disclosures required by this section shall be given not less than 3 business days prior to consummation of the transaction.

Source: 15 U.S.C. §1639(b)(1) · source URL · snapshot f472cb3e49e3918a

15 U.S.C. §1639(c)(1)(A) — No prepayment penalty on HOEPA loans

A mortgage referred to in section 1602(aa) 1 of this title may not contain terms under which a consumer must pay a prepayment penalty for paying all or part of the principal before the date on which the principal is due.

Source: 15 U.S.C. §1639(c)(1)(A) · source URL · snapshot f472cb3e49e3918a

15 U.S.C. §1639(e) — No balloon payment on HOEPA loans

No high-cost mortgage may contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This subsection shall not apply when the payment schedule is adjusted to the seasonal or irregular income of the consumer.

Source: 15 U.S.C. §1639(e) · source URL · snapshot f472cb3e49e3918a

15 U.S.C. §1639(h) — No pattern or practice of HOEPA lending without regard to repayment ability

A creditor shall not engage in a pattern or practice of extending credit to consumers under mortgages referred to in section 1602(aa) 1 of this title based on the consumers’ collateral without regard to the consumers’ repayment ability, including the consumers’ current and expected income, current obligations, and employment.

Source: 15 U.S.C. §1639(h) · source URL · snapshot f472cb3e49e3918a

15 U.S.C. §1639(j) — No recommended default

No creditor shall recommend or encourage default on an existing loan or other debt prior to and in connection with the closing or planned closing of a high-cost mortgage that refinances all or any portion of such existing loan or debt.

Source: 15 U.S.C. §1639(j) · source URL · snapshot f472cb3e49e3918a