Senator Dodd Unifies Industry Members, Consumer Representatives to Help Preserve American Dream of Homeownership 

As part of his efforts to preserve homeownership for millions of American families and to strengthen local communities and our nation’s economy, Senator Chris Dodd (D-CT), Chairman of the Senate Committee on Banking, Housing, and Urban Affairs, today announced that leading stakeholders in the subprime mortgage market have agreed to a comprehensive set of principles when working with families facing foreclosure on their homes.  The principles are based on the premise that everyone – investors, servicers, lenders, homeowners, and neighborhoods – benefits when families’ homes are protected from foreclosure to the extent possible. 

The announcement came two weeks after Chairman Dodd convened the Homeownership Preservation Summit, a meeting with the leaders of some of the largest subprime mortgage lenders, securitizers, and servicers, as well as consumer and civil rights groups, to discuss ideas and develop solutions to the subprime mortgage market crisis which is currently threatening millions of Americans with foreclosure on their homes.  A longtime advocate for homeownership, Chairman Dodd has focused on predatory lending and the subprime market turmoil for several months, having convened two hearings since becoming Chairman in January.

“These principles represent a critical step in preserving homeownership and economic opportunity.  I applaud the tremendous leadership demonstrated by the Mortgage Bankers Association, Citigroup, JPMorgan Chase, Litton Loan Servicing, HSBC, Bear Stearns, Freddie Mac, Fannie Mae, the Self-Help Credit Union, the Leadership Conference on Civil Rights, AARP, and ACORN to take active and effective measures to preserve homeownership for families at risk of losing their homes,” said Dodd.

“The crisis affecting the subprime market is a comprehensive one, and involves many parties.  It cannot be solved overnight, and cannot be solved by one party acting alone. Each party needs to do its part in helping to address this problem.  The companies and organizations that endorse these principles demonstrate their commitment to being part of finding solutions to foreclosures.

“I commend the organizations and companies that have joined me in formulating and agreeing to these principles, and I urge others to participate, or face explaining to their customers and the public their refusal to adhere to common-sense guidelines that will help preserve homeownership and strengthen our communities and our nation’s economy.”

Since assuming the Chairmanship of the Banking Committee, Dodd has made ending subprime lending abuses a high priority.  He has chaired two oversight hearings, and successfully called on federal financial regulators to adopt new rules on subprime loans.  In addition, Freddie Mac decided to stop buying certain abusive subprime products, and commit $20 billion to refinancing subprime loans.  Last week, Dodd led an effort endorsed by nine other Committee Democrats to call on the Federal Reserve Board to apply the subprime lending guidance to non-bank lenders.

Senator Dodd has invited other organizations interested in agreeing to the principles to contact Banking Committee staff.

To view the official Press Release along with comments from the lending industry and investor , please click here.

To view the Principles, please click here.