WOODBURY, N.Y. - The subprime lender Delta Funding Corp. said it will no longer originate loans that are subject to the Home Owners Equity Protection Act.
The 1994 law requires more disclosures to the borrower if a loan has an annualized percentage rate of 10 percentage points or more above the rate on comparable government securities.
"Because of the higher costs associated with HOEPA loans, they have become a lightning rod of criticism and attack," Delta president and chief executive Hugh Miller said in a press release. "Although ending originations of HOEPA loans may result in some borrowers' no longer having access to capital, we at Delta perceive this step as necessary."
Last year Delta reached a settlement in connection with abusive-lending charges leveled by the New York State Banking Department, the state's attorney general, and the U.S. Justice Department. The company did not admit to wrongdoing.