[Congressional Record Volume 144, Number 94 (Wednesday, July 15, 1998)]
[Extensions of Remarks]
[Page E1314]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   HOMEOWNERS PROTECTION ACT OF 1998

                                 ______
                                 

                               speech of

                        HON. BENJAMIN A. GILMAN

                              of new york

                    in the house of representatives

                         Tuesday, July 14, 1998

  Mr. GILMAN. Mr. Speaker, I rise today in support of the Homeowners 
Insurance Protection Act which will amend the Truth in Lending Act and 
stop the abusive practice of overcharging homeowners for private 
mortgage insurance.
  Private mortgage insurance has given millions of Americans the 
opportunity to become homeowners. This is a valuable service that 
mortgage industry provides, however, most homeowners are unclear about 
their rights under this insurance. Many Americans believe that private 
mortgage insurance insures them, when in fact it insures the lender 
while the homeowner pays the premium. As the practice stands, 
homeowners who have paid off 20 percent of their loan no longer need 
the insurance, but they do not realize it and continue to pay the 
premium throughout the life of their mortgage. In some cases, 20 to 30 
extra years of payments. For an individual who pays $350 per year on a 
30-year mortgage, that can mean paying an extra $7,000 to $10,000 of 
unnecessary premiums.
  This legislation will bring about two simple reforms. It will require 
full disclosure of a homeowners' right to cancel the insurance once 
they have down 20 percent on their home. It will also require the 
mortgage lenders to inform consumers at least once a year of their 
cancellation rights. Both of these requirements must be provided by the 
credtitor at no extra cost to the consumer.
  This bill will protect the rights of homeowners from overpaying 
unnecessary premiums while maintaining the important role of private 
mortgage insurance in promoting home ownership. Accordingly, I strongly 
urge my colleagues to join me in supporting this important legislation.

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