October 11, 2007

Statement of Chairman Dodd in Reaction to Treasury and HUD Mortgage Foreclosures Announcement

“The Administration should have acted much sooner. It has been six months since I convened a summit where leading stakeholders in the subprime market agreed to a comprehensive set of principles to help families facing foreclosure remain in their homes. While the agreement was a step forward, I believe that the industry and Administration need to do more to alleviate this on-going crisis. Moody’s says that only 1% of resetting subprime loans have been modified, which is unacceptable and much too small a number given the scope and extent of the problem. About 2 million Americans are facing resets in the next 12 to 18 months, and unless the industry ramps up quickly, as they promised they would do, we will see foreclosures continue to skyrocket. “I intend to do everything in my power as Chairman to continue to press the Administration and industry to address this crisis in a meaningful way. Clearly we need to address these problems in a comprehensive manner and I share FDIC Chairman Bair’s belief that there needs to be some sort of formulaic approach to doing modifications because the numbers are just so large. Without that, I fear that too many borrowers may slip through the cracks and simply lose their homes. We can’t allow that to happen.”