Lloyd Bentsen: “Private mortgage insurance is good. It has helped a lot of Americans who can put down as little as 5 percent, 6, 7, 8…”

“Private mortgage insurance is good. It has helped a lot of Americans who can put down as little as 5 percent, 6, 7, 8, 9, 10 percent, to get into a house. This is one of the reasons why homeownership is so high in this country and has been rising. What it does, and I think Members need to understand what it does, is it covers the first 20 percent of the exposure. It limits the exposure for the investor of the overall mortgage. Now, what happens is once one has paid down that amount, the investor is already protected because they hold a first lien on the property and it is assumed, it is now universal, that the property is going to cover the additional 80 percent. So what happens, and the problem that we are dealing with here, is people are paying for something they no longer need, and it may be $30 a month, which adds up to more than $300 a year over a 15-year life of a 30-year mortgage when somebody would have gotten to 75 percent. That is real money to a lot of Americans. So that is what we are trying to deal with. I think this is a sound bill, as well. It only affects future mortgages, so it does not affect existing contracts, it does not affect existing mortgage pools, which protects investors.”