Vicente Gonzalez: “Mr. Speaker, mortgage insurance is and always has been a powerful tool for American home buyers. Of course, what it does…”

“Mr. Speaker, mortgage insurance is and always has been a powerful tool for American home buyers. Of course, what it does is to reduce the risk of making a low down payment, long-term mortgage, by insuring that the lender, or the investor in that mortgage, will be paid in the event the borrower defaults. With mortgage insurance, tens of millions of Americans have been able to afford a home. Without mortgage insurance, buyers would have to come up with a down payment of about 20 percent, and probably would be able to get only a short-term mortgage. Before the advent of mortgage insurance, only about a third of Americans owned a home. Today more than two-thirds do. As great as mortgage insurance is, the truth is that a vast number of people are paying for insurance they no longer need. To the average buyer, it costs anywhere from $30 to $100 a month. Anyone who has a good payment record and at least 20 percent equity probably does not need mortgage insurance. But the truth is buyers who should not be paying for insurance are paying millions of dollars in premiums. Some buyers who know this, like our colleague, the gentleman from Utah [Mr. Hansen], have run into brick walls when they have sought to cancel. This bill does two things. It preserves mortgage insurance as the valuable and vital tool that it is.”