Dodd Takes Action To Protect Homeowners And American Economy
March 23rd, 2007
PRESS RELEASE
WASHINGTON - At a hearing of the Senate Banking Committee yesterday, Senator and Presidential candidate Chris Dodd shed light on a consistent history of neglect by federal regulators with regard to the subprime mortgage crisis. The crisis could cause up to 2.2 million homeowners to lose their homes in the coming years.
The issue is especially prominent in South Carolina, where more than 17% of subprime mortgages will end in foreclosure. In December 2006, nearly 350 South Carolinians lost their homes to foreclosure after taking out subprime mortgages, according to RealtyTrac. Foreclosure rates have skyrocketed 68% in Charleston since 2001, and have increased 16% in Columbia in the same period.
At the hearing, Dodd “laid out what he called a ‘chronology of regulatory neglect’ as banks and other lenders loosened their standards for making riskier mortgage loans during the boom. He later said he plans to convene a special summit of regulators, mortgage lenders, consumer groups and others to work out a plan of relief for vulnerable homeowners,” according to the Associated Press in an article that ran in all four early states.
Dodd also spotlighted federal regulatory failures to make use of powers granted them by Congress to protect borrowers and consumers. Only recently, in reaction to Senator Dodd’s focus on the issue, regulators said they would rewrite lending standards to increase protection for subprime borrowers.
In addition to federal regulators, Dodd questioned executives at four out of the five top subprime lending companies. New Century, one of the largest subprime lenders in the country, refused to testify. Dodd also heard from a consumer, a 77-year old widow who testified about her experiences in the subprime market following the death of her husband.
Dodd noted the importance of protecting the mortgage market for the American economy. He added his twofold goals for the hearing: “First, to save as many people as possible from foreclosure. Second, to make sure that consumers receive the protections that need and deserve. Our leaders should help Americans achieve the dream of homeownership - not take that dream away.”
For more Information contact:
Hari Sevugan
Cell - (312) 203-2207
Office - (202) 737-DODD (3633)
Christy Setzer
Cell - (860) 331-1913
Office - (202) 737-DODD (3633)