S.Amdt. 4357

SA 4357. Mr. SCHUMER submitted an amendment intended to be proposed
by him to the bill H.R. 6644, a bill to increase the supply of housing
in America, and for other purposes; which was ordered to lie on the
table; as follows:

At the appropriate place, insert the following:

SEC. ___. MORTGAGE INSURANCE REFORMS.

(a) Findings.--Congress finds the following:
(1) Each year, millions of homebuyers must purchase costly
mortgage insurance, which can tack on thousands of dollars in
costs to the already expensive process of buying a home,
which is an aspiration increasingly out of reach for far too
many people in the United States.
(2) Government-backed mortgages require the borrower to
purchase mortgage insurance in the form of an upfront
mortgage insurance premium and an annual mortgage insurance
premium that is paid in monthly installments.
(3) Conventional mortgages require private mortgage
insurance (in this section referred to as ``PMI'') for the
approximately 800,000 homeowners each year who make a down
payment of less than 20 percent of the home purchase price.
(4) More than 28 percent of all mortgage loans that
originated between 1999 and 2022 required mortgage insurance.
(5) PMI costs families an average of $2,110 per year, or
$176 per month.
(6) For some families, PMI can cost as much as $6,210 per
year, or more than $500 per month.
(7) For mortgages insured by the Federal Housing
Administration (in this section referred to as the ``FHA''),
the average mortgage insurance premium is $1,650 per year, or
about $137 per month.
(8) In 2023, the FHA announced a 30 basis-point reduction
to annual mortgage insurance premiums for new mortgages
insured by the FHA, saving more than 1,100,000 borrowers an
average of $453 each annually. Total savings for these
borrowers over a loan life of roughly 10 years is forecasted
to amount to more than $5,100,000,000.
(b) Maximum Capital Ratio for Mutual Mortgage Insurance
Fund.--
(1) In general.--Section 205(f) of the National Housing Act
(12 U.S.C. 1711(f)) is amended--
(A) by redesignating paragraph (4) as paragraph (5); and
(B) by inserting after paragraph (3) the following:
``(4)(A) Subject to subparagraph (B), the Secretary shall
ensure that the capital ratio of the Mutual Mortgage
Insurance Fund does not exceed 5.75 percent.
``(B) At the end of the 2-year period beginning on the date
of enactment of this paragraph, and annually thereafter, the
Secretary--
``(i) shall evaluate, based on market conditions and the
health of the Mutual Mortgage Insurance Fund, whether to
increase or decrease the maximum percentage under
subparagraph (A); and
``(ii) may increase or decrease the maximum percentage
under subparagraph (A) if the Secretary determines
appropriate.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date that is 60 days after the date
of enactment of this Act.
(c) Automatic Termination of Premium Payments for FHA
Mortgage Insurance.--

[[Page S897]]

Section 203(c)(2)(B) of the National Housing Act (12 U.S.C.
1709(c)(2)(B)) is amended--
(1) by striking ``for the following periods:'' and all that
follows through ``(ii) For any mortgage involving an original
principal obligation (excluding any premium collected under
subparagraph (A)) that is greater than or equal to 90 percent
of such value, for the first 30 years of the mortgage term;
except that notwithstanding the matter preceding clause
(i),'' and inserting the following: ``for the first 5 years
of the mortgage term, except that'';
(2) by striking ``such value'' and inserting `` the
appraised value of the property (as of the date the mortgage
is accepted for insurance)''; and
(3) by striking ``under this clause'' and inserting ``under
this subparagraph''.
(d) Cancellation or Automatic Termination of Private
Mortgage Insurance.--Section 2 of the Homeowners Protection
Act of 1998 (12 U.S.C. 4901) is amended--
(1) in paragraph (2), by striking ``80 percent'' each place
that term appears and inserting ``85 percent''; and
(2) in paragraph (18), by striking ``78 percent'' each
place that term appears and inserting ``80 percent''.
______