Sen. Dodd offers cooperation on mortgage plan
WASHINGTON (Reuters) - Senate Banking Committee Chairman Christopher Dodd, a Democrat who is a candidate for President, on Friday offered to work with the Bush administration on a plan to reduce foreclosures amid a widening crisis in mortgage finance markets.
The Connecticut Democrat urged Treasury Secretary Henry Paulson to prevent any further delays in helping troubled homeowners get the terms of their mortgages modified.
He added in a letter to Paulson, "The objective of modifications should be to make homeownership sustainable, rather than deferring foreclosure to a later date."
Dodd's letter came as Paulson was said to be hammering out a plan with mortgage lenders to freeze interest rate payments for many troubled subprime mortgage borrowers, with the goal being to help them avoid losing their homes.
Many borrowers in months ahead face unmanageable increases in their adjustable rate mortgages and Paulson was expected to announce details of the freeze plan soon, possibly on Wednesday, sources familiar with the matter told Reuters.
"Just as I have been willing to work with loan servicers and other mortgage market participants to mitigate foreclosures, I make the same offer to work with you so that we can more effectively address this national crisis in the coming months," Dodd wrote to Paulson.
Dodd said mortgage servicing companies have been slow to work toward reducing foreclosures under principles they agreed on in May at a meeting on the issue that Dodd convened.
Meantime, weaker credit and housing markets "have made the environment for loan modifications more challenging," he said.
"It is imperative that the administration ensure that there is no further delay in reaching homeowners in need of loan modifications while they are still capable of sustaining homeownership," he said.
(Reporting by Kevin Drawbaugh; editing by Carol Bishopric)
