As recent news reports show that foreclosures in Connecticut have risen 134% in the month of October, Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, held an oversight hearing today on the implementation of the Emergency Economic Stabilization Act, focusing on foreclosure prevention efforts, ensuring that lenders are using the federal funds for lending, and executive compensation policies.

Today, Dodd also expressed concern about the new Connecticut foreclosure statistics. According to the New Haven Register, the number of homes receiving foreclosure notices increased from one in 1,087 homes in September to one in every 460 in October, making Connecticut the 11th ranked state in the nation for foreclosure activity in October.

“The foreclosure crisis is the root cause of the larger financial crisis.  And the root of the foreclosure crisis is the bad lending practices in which many well-known lending institutions engaged,” said Dodd.  “This is not just a national problem, it is also hitting home in Connecticut as hundreds more families are facing the realities of losing their homes.

“I appreciate the efforts that numerous lenders have started to make in this area, but much more must be done on a lender-by-lender as well as on an industry-wide basis to address the foreclosure crisis. I want to see more progress from the financial sector – more progress in foreclosure mitigation, in affordable lending, and in curbing excessive compensation.  And if that progress is not forthcoming, we are prepared to legislate.”

Below are Senator Dodd’s proposals to curb the tide of foreclosures sweeping across Connecticut and the country:

• Bankruptcy Reform: The average American homeowner should be able to seek the protection of bankruptcy court to save his or her home.  That protection is currently available for vacation homes, cars, boats, and other items – but not for primary residences.

• HOPE for Homeowners: Now is the time to utilize HOPE for Homeowners and other initiatives designed to truly preserve homeownership and stabilize the economy. HOPE for Homeowners is a law authored by Dodd that can help 400,000 or more families keep their homes without costing taxpayers.   

• Temporary Moratorium on Foreclosures: 9,800 families enter foreclosure each day. Dodd supports a temporary moratorium on foreclosures so that lenders, servicers and homeowners can come together to try to restructure their loans on terms agreeable to all.

• The Dodd-Bair Program: A home loan guarantee initiative authorized by the recently-enacted financial rescue law which the FDIC has agreed to operate. This initiative can help preserve homeownership for millions of families – and thereby help put the economy on the right track.

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