What type of APR increase does HOEPA specify for loans secured by personal property under $50,000?

The correct answer is that HOEPA specifies an APR increase of 8.5 percentage points for loans secured by personal property under $50,000. This regulation, part of the Home Ownership and Equity Protection Act (HOEPA), is designed to protect borrowers from predatory lending practices. Specifically, it triggers certain disclosures and protections for high-cost loans. The threshold of 8.5 percentage points is significant as it indicates a higher risk associated with these types of loans, prompting additional regulations to ensure the borrower's understanding of the loan terms and to prevent abusive lending practices.

Understanding this threshold is crucial for both lenders and borrowers. It serves as a regulatory benchmark to differentiate between standard loans and those considered high-cost, thereby qualifying for various consumer protections under the law. Familiarizing oneself with this aspect of HOEPA is essential for compliance in lending practices and for ensuring that borrowers’ rights are preserved.