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Curing HOEPA Violations
Answer by David Dickinson, BOL Guru
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Question: If a bank makes a loan subject to HOEPA without proper disclosures, how can the bank cure the violation?
Answer: I don't believe that you can cure this error. The HOEPA disclosure is a "material disclosure." If you fail to give a HOEPA disclosure before consummation and you close the loan, you can't fix the error as you can't back up the clock. Also, if this is a rescindable loan, the right of rescission was also not properly handled if you didn't give a HOEPA disclosure.
Generally, my suggestion is let it go, train and try not to do it again. Notifying the customer will only draw attention to the un-fixable error. You may want to consult a legal professional as well.
First published on BankersOnline.com 08/18/03
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