President Clinton on Wednesday signed into law a measure that will automatically cancel private mortgage insurance when a borrower's equity in a home reaches 22%.
The law applies to mortgages made after July 29, 1999.
Homeowners also will be able to ask lenders to cancel private mortgage insurance after their equity reaches 20%, as long as they are current on their loan payments and their home has not depreciated below its purchase value.
The law requires high-risk mortgage borrowers to continue paying for coverage until halfway through the loan's term, even if their equity reaches 22%.
The law also eliminates the Thrift Depositor Protection Oversight Board, which had been created to supervise the now defunct Resolution Trust Corp.