Lawmakers seek to remove paid medical bills from mortgage originations

Three U.S. Congressmen are offering an novel concept when it comes to kick starting home sales.


A new bill proposed by Reps. Don Manzullo (R-Ill.), Ralph Hall (R-Tex.) and Heath Shuler (D-N.C.) will prevent institutions from keeping resolved medical debts on credit reports, where they end up serving as barriers to obtaining a mortgage.

“Medical debt is not a reliable indicator of credit risk, yet nearly a quarter of Americans have seen their credit scores plummet because of small, routine medical bills,” said H.R. 2086 cosponsor Rep. Nydia Velazquez (D-N.Y.), Ranking Member of the House Small Business Committee. “This bill provides a common-sense, simple solution to address this problem now and protect consumers in the future.”

The lawmakers behind the legislation, called the Medical Debt Responsibility Act, want paid medical debts removed 45 days after a full repayment is made.

Current practices allow keeping paid medical debts — some as small as a few dollars — on consumer credit reports for a period of seven years.

Read on.