The House Banking Committee votes today on legislation that would make it easier for borrowers to cancel private mortgage insurance.
The bill, sponsored by Rep. Jim Hansen, R-Utah, would require lenders to send annual notices explaining what it would take to terminate coverage.
The Senate Banking Committee Tuesday postponed a vote on a tougher mortgage insurance bill until at least April 6, when lawmakers return from an Easter recess.
Sen. Alfonse M. D'Amato, chairman of the banking panel, said more time is needed to build Republican support. Many GOP members had balked at a provision requiring automatic cancellation of mortgage insurance when a borrower's equity reaches 20% of the loan principal.
Instead, they are leaning toward a proposal by Sen. Lauch Faircloth, R- N.C., that would let lenders decide how much equity is needed to trigger cancellation.
The outcome of today's vote in the House committee is uncertain because Republicans are divided on the bill and many Democrats are pushing for provisions to bar mortgage contracts that require insurance for the life of the loan.
"Any legislation we pass must establish the consumer's right to cancel (private mortgage insurance)," said Rep. Joseph P. Kennedy 2d, D-Mass.
Rep. Hansen complained that borrowers' costs would rise if lenders weren't allowed to decide the conditions for canceling insurance.