WALNUT CREEK, Calif., March 30 /PRNewswire-FirstCall/ -- In what Steve Smith, Chief Executive Officer of The PMI Group, Inc. and PMI Mortgage Insurance Co., called a welcome development for U.S. homebuyers, a bipartisan coalition of legislators today introduced a bill to make permanent the federal tax deduction for mortgage insurance premiums for borrowers making $109,000 or less.
"The proposed legislation making the cost of mortgage insurance tax deductible beyond 2007 will help low- and moderate-income Americans overcome barriers to homeownership," Smith commented. "Mortgage insurance offers individuals and families a simple, safe, and smart way to buy a home with a low down payment, and that is especially important in this economic climate."
David Katkov, President and Chief Operating Officer of PMI Mortgage Insurance Co., explained, "This is a very important piece of legislation for low- to moderate income homebuyers. If the deduction had been available in 2006, more than 80 percent of the borrowers whose loans PMI insured in our traditional business in the United States would have qualified for it. Making this deduction permanent will help address the challenge of affordability that so many aspiring homeowners face."
The cost of mortgage insurance is tax deductible for the first time for transactions closed in 2007. Borrowers with adjusted gross incomes below $100,000 may deduct 100 percent of their mortgage insurance premiums paid between January 1 and December 31, 2007. Deductions are phased out at 10 percent increments for borrowers with adjusted gross incomes between $100,000 and $109,000.
The bill, H.R.1813, was introduced jointly by Representative Sander Levin (D-MI) and Representative Paul Ryan (R-WI) with Representative Shelley Berkley (D-NV), Representative Dave Camp (R-MI), Representative Eric Cantor (R-VA), Representative Joe Crowley (D-NY), Representative Rahm Emanuel (D-IL), Representative Phil English (R-PA), Representative Wally Herger (R-CA), Representative John Lewis (D-GA), Representative Ron Lewis (R-KY), Representative Paul Ryan (R-WI), Representative Allyson Y. Schwartz (D-PA), Representative John S. Tanner (D-TN), and Representative Jerry Weller (R-IL).
PMI Mortgage Insurance Co.
PMI Mortgage Insurance Co. (PMI US), a subsidiary of The PMI Group, Inc. , provides residential mortgage insurance to mortgage lenders, capital market participants, and investors throughout the United States. PMI US is incorporated in Arizona, headquartered in Walnut Creek, CA, and licensed in all 50 states, the District of Columbia, Puerto Rico, Guam, and the Virgin Islands. By mitigating default risk, residential mortgage insurance expands home ownership opportunities and assists financial institutions in reducing the capital they are required to hold against low down payment mortgages. PMI US is rated AA by Standard and Poor's, Aa2 by Moody's, and AA+ by Fitch. For more information: http://www.pmigroup.com/.
Cautionary Statement
Statements in this news release that are not historical facts or that relate to future plans, events or performance are "forward-looking" statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements involve risks and uncertainties that could cause PMI's actual results to differ materially from those expressed or implied in this release. Risks and uncertainties related to PMI's business are discussed in PMI's SEC filings, including its Form 10-K for the year ended December 31, 2006. We undertake no obligation to update forward-looking statements.
Under current tax law, mortgage insurance tax deductibility is based on transactions closed in 2007, and mortgage insurance premiums paid between January 1 and December 31, 2007 and allocable to 2007. Deductions are phased out in 10% increments for borrowers with adjusted gross incomes between $100,000 and $109,000. Taxpayers should consult their own tax advisors concerning applicability of this new deduction to their particular circumstances under the internal Revenue Code and the law of any other taxing jurisdiction. This information is not intended or written to be used, and it cannot be used, for the purpose of avoiding U.S. federal, state, or local tax penalties.
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