The Senate Banking Committee today is expected to approve legislation that would force lenders to cancel private mortgage insurance when a homeowner has paid off 20% of a loan.
The bill, introduced by Senate Banking Committee Chairman Alfonse M. D'Amato, is co-sponsored by fellow Republican Pete Domenici and Democrats Chris Dodd and Richard Bryan.
An aide to Sen. Bryan predicted the measure would pass easily. "On the Democratic side, this is like Mom and apple pie," he said.
Sen. D'Amato's original plan would have required lenders only to notify borrowers of their right to cancel insurance. But the New York Republican has pledged to add an automatic termination provision to the legislation being voted on today.
On the House side, a vote on similar legislation was pushed back two days to Thursday as lawmakers negotiate in hopes of reaching bipartisan agreement.
The current House plan, introduced by Rep. Jim Hansen, R-Utah, would require lenders to send annual notices explaining what it would take to cancel the insurance.
But Democrats want to go further and bar mortgage contracts from requiring insurance for the life of the loan. A Democratic aide said he was optimistic that a deal could be reached. "There's a lot of desire for a bipartisan bill," he said.