For reference, normally banks mandate that stuff when the loan to value (LTV) ratio is very high. Meaning they didn't put a large down payment there. It's insurance you pay so that in case you quit paying or cant, the bank can recoup their losses. Essentially you're forced to pay to insure the bank's investment. Now normally you can remove it once you reach whatever LTV the financial has in their policy (usually 75-80%), but at the time when the politician was dealing with it, you basically had it on for the "life of loan."