Lloyd Bentsen: “as a member of the House Banking Committee, I rise in strong support of H.R. 3637, legislation that will make technical…”

“as a member of the House Banking Committee, I rise in strong support of H.R. 3637, legislation that will make technical corrections and clarifications to the Homeowners Protection Act. This law ensures that homeowners have the right to cancel their Private Mortgage Insurance (PMI) on their home mortgages once the homeowner attains a certain level of equity in the home (usually 22%, but in some cases 20%). Provisions included in this legislation were also included in H.R. 1776 which was approved by the House, with my support, on April 3. This legislation clarifies that PMI cancellation rights for adjustable rate mortgages (ARMs) are based on the amortization schedule that is currently in affect. This will ensure that consumers get full benefit of any adjustments that have been made based upon recent calculations. In addition, this legislation ensures that balloon mortgages are also treated as ARMs so that consumers will receive the full benefit of any interest changes that are favorable to them. This bill ensures that consumers with a ``good payment history'' have the right to cancel their PMI. In the past, there has been some confusion about what this term means. This legislation would make technical corrections so there is less ambiguity about this term. This measure includes a proviso that clarifies that these PMI cancellation rights only apply to mortgages originated after the 1998 law's enactment date.”