For major mortgage lenders, these enactments could pose a compliance nightmare. The legislation places a significant burden on mortgage servicers, particularly given the extensive transfers and repurchases typically occurring in the secondary market. LTV ratios are based on original appraisals or sales prices, which servicers are not likely to have available. In any event, loan data systems, recordkeeping procedures, and PMI pricing schedules must be reconsidered and reconfigured. Despite the ongoing delay in reporting S. 318 out of the Banking Committee, Senate enactment of the bill is all but certain.
Opposition is scant and focused on technical issues at the margins.
House passage of H.R. 607 was by consent calendar, with only 7 members opposing passage. The significant differences in the two legislative measures will likely require conference committee action. Clearly, for those homeowners that have been unaware of the existence or cost of PMI coverage, will be better informed as a result of this legislation. No doubt more homeowners will attempt to avoid required PMI coverage and will seek cancellation when permitted. Such a development is a consumer benefit.