For the second time in a week, the House has approved legislation reforming the private mortgage insurance system.
The President is expected to sign into law a bill that would automatically cancel private mortgage insurance when a borrower's equity in a home reaches 22%.
Under the bill, homeowners may request cancellation after their equity reaches 20%, provided they are current on their loan payments and their home has not depreciated below its purchase value. However, high-risk mortgage borrowers would have to continue paying for coverage until halfway through the loan's term even if they had 22% in equity. Similar laws in eight states would be exempted from preemption but may not be amended after two years.
The House had to vote on the measure a second time after the Senate tacked on an unrelated amendment when it approved the legislation Wednesday.
Also, the legislation would eliminate the Thrift Depositor Protection Oversight Board, which had been created to supervise the now-defunct Resolution Trust Corp. Abolishing the board is expected to save the federal government $8 million.