“I congratulate Congressmen Miller, Watt, and Chairman Frank and their staffs who, I know, have been working extremely hard to put this legislation together.  I intend to study the proposed legislation as I draft a bill with my colleagues.  As I have said before, to be effective, legislation must meet two tests: first, it must establish strong standards against abusive practices such as prepayment penalties, steering, and other problems.  Second, it must provide for strong enforcement.  The problem in the market today is that none of the market players have a stake in the long-term success of the mortgage: brokers get paid on volume; lenders quickly sell off most subprime loans to Wall Street; and Wall Street slices and dices the mortgages into securities and sells them off.  They all make their money whether or not the borrower can afford the loan.  The homeowner is left holding the bag.  Together, strong standards and tough remedies will reward affordable loans and punish predatory lending.  In my view, that is the measure of a successful bill, and that is what my bill will do.

"Countrywide has taken a step in the right direction in authorizing the Neighborhood Assistance Corporation of America (NACA) to help its borrowers.  Under Bruce Mark's leadership, NACA has a strong record of helping homeowners navigate the daunting process of modifying their loans in order to make them more affordable and to avoid foreclosure. But Countrywide must ensure that each and every one of its subprime borrowers has access to equally effective help.  To that end, Countrywide should make sure that all homeowners that may struggle to pay their mortgages are given the opportunity, on the same terms, to get their loans modified to ensure long-term affordability.

“Countrywide’s announcement to modify some loans is a welcome, if late, decision.  I am pleased Countrywide is implementing the Homeownership Preservation Principles they agreed to last May.  However, this problem reaches far beyond the 82,000 borrowers they have agreed to assist.  The reality is, many more hardworking Americans are at risk of losing their homes unless subprime lenders quickly adopt and implement a set of standards and procedures for reaching out to them. Lenders have a responsibility to help qualified borrowers modify their mortgages so that they are affordable in the long-term. As the Chair of the FDIC says, we need a rules-based approach to address this problem so that borrowers are not mired in red tape while attempting to save their homes.  The wave is coming -- lenders need to act now.”

Washington, D.C. – Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today sent a letter to Treasury Secretary Henry Paulson reiterating the need for lenders to modify subprime loans in order to avert massive foreclosures across the country.  While Dodd praised Secretary Paulson for his acknowledgement yesterday that more loan modifications are necessary to help keep people in their homes, the letter went on to urge the Treasury Department to do more to ensure that lenders implement these long-term modifications quickly.  Chairman Dodd was joined by Senators Johnson (D-SD), Reed (D-RI), Schumer (D-NY), Bayh (D-IN), Carper (D-DE), Menendez (D-NJ), Akaka (D-HI), Brown (D-OH), Casey (D-PA), and Tester (D-MT) in sending the letter. 

Senator Chris Dodd (D-CT) today reacted to Treasury Secretary Henry Paulson’s proposals to address the mortgage crisis.

“For months, I have been working to bring about loan modifications and other changes to keep families in their homes.  Therefore I welcome Secretary Paulson’s call today for a set of standards for servicers to follow so that the modification pipeline, which has been all but completely blocked, can be opened.  It’s now imperative the Treasury Department work with homeowners, servicers, and others to preserve the homes of millions of subprime borrowers, many of whom were victimized by predatory lending.”

Today, we are facing a serious meltdown in the subprime mortgage market.

“I want to thank Senator Reed for chairing this hearing on housing needs in the Gulf Coast.  Though two years have passed since hurricanes Katrina, Rita, and Wilma hit the United States, causing the largest displacement of people in America’s history, communities are still struggling to recover.  Families are still struggling to be able to come home.   While there are some positive signs that the most adversely affected areas, such as New Orleans, are recovering with more schools and businesses opening each passing month -- there are still too many families who cannot afford to come home, and there are still pressing housing needs that must be met.   I’m particularly troubled by new census data that show that minorities, renters, and families with children are having difficulty returning home.   We must ensure that all people have an opportunity to come home.

Requests Assurance from Secretary Jackson that Public Housing Will Not Be Demolished Unless HUD Will Replace and Revitalize Buildings

Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, late last week sent a letter to Alphonso Jackson, Secretary of the Department of Housing and Urban Development (HUD), expressing his concern about HUD’s approval of plans to demolish four major public housing sites in the city of New Orleans. 

Senator Chris Dodd (D-CT), Chairman of the Banking, Housing, and Urban Affairs Committee, today announced that the Committee passed the Federal Housing Administration Modernization Act of 2007.  The legislation seeks to help American families that have been hit hard by the current crisis in the mortgage markets, including those who currently face the threat of foreclosure and those who may be trying find fair and affordable financing to buy a new home.

“The decision by the Administration to modify the GSE portfolio caps can only be described as timid and inadequate.  I have been urging the Administration for many weeks to take bold action to maintain liquidity and stability in the mortgage markets.  But instead of strong, effective action, the Administration has taken what can at best be described as a baby step, and what is in reality little more than a symbolic gesture.  The Fed, by its actions yesterday, now seems to understand what I and others have been arguing for quite some time: that the subprime mortgage crisis is a serious matter for homeowners and for the overall economy.  It's time for the Administration to come to the same recognition and act appropriately to protect homeowners from abusive loans and restore confidence and liquidity to the mortgage markets.”