Finance
Section 32 mortgage loans (High-Cost Mortgages under HOEPA) are restricted because they:
AAre FHA loans with higher premiums
BFeature high interest rates or fees that could harm borrowers, triggering additional consumer protections✓ Correct
CAre available only to investors
DRequire a balloon payment within 5 years
Explanation
HOEPA (Home Ownership and Equity Protection Act) and Dodd-Frank identify 'high-cost mortgages' with APR or fee triggers. These loans are subject to additional restrictions (no prepayment penalties, no balloon payments in most cases) and enhanced borrower disclosures.
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