Consumers Union Praises Senate Vote Outlawing Unfair Mortgage Terms
March 18, 1997
Washington, DC — Consumers Union, the non-profit publisher of Consumer Reports magazine, called a bill approved by the Senate Banking Committee today “a significant relief for American homeowners.” The bill, sponsored by Senator Alphonse D’Amato (R-NY), allows consumers to stop making mortgage insurance payments once they have built up at least 20 percent equity in their home.
Michelle Meier, CU’s counsel for government affairs, stated: “Unfair mortgage insurance requirements can force American families to pay hundreds of dollars each year for coverage they don’t even need. The D’Amato bill will help these families cut their housing costs by hundreds of dollars each year.”
Private mortgage insurance (PMI) is often required when borrowers put less than a 20 percent downpayment on their home. Some homeowners find that they are unable to get their lender to allow them to cancel the insurance even after they have made payments on the mortgage for years. The D’Amato bill will automatically cancel the insurance once the mortgage balance reaches 80 percent of the original value of the home.