Sen. Dodd readies response to mortgage crisis
DES MOINES, Iowa (Reuters) - A key Democratic lawmaker in an uphill bid for the White House pledged on Wednesday to offer a bill soon to tackle mortgage lending abuses amid a fast-spreading housing finance crisis.
Sen. Christopher Dodd said his bill would demand more disclosure and accountability by mortgage and bank officers, curb deceptive loan practices, and make sure there is a federal "cop on the beat" to guard against abuses.
"We'll announce it Monday or Tuesday," said Dodd, a Connecticut Democrat seeking his party's 2008 presidential nomination, in a Reuters interview after a campaign event.
Dodd aides later said the mortgage lending legislation would be formally introduced before mid-December.
The senator said he has talked with Republicans and hopes Congress will give final passage to the legislation and send it to President George W. Bush to sign into law early next year.
"It's got to happen. This problem is not going away," said the chairman of the pivotal Senate Banking Committee.
The House of Representatives overwhelmingly passed its own version of the legislation on November 15. It calls for licensing mortgage brokers and bank loan officers, bans certain predatory practices and bolsters borrowing protections.
The Bush administration has said it supports some parts of the House bill, opposes others and wants to work with Congress. It has not threatened a veto.
Dodd said his bill will be "a little tougher." Then he added, "It will be different. I don't want to say tougher."
He explained it will help make buyers aware of risky loans by demanding answers from brokers and bankers. "If you are a broker, who do you represent?" Dodd said in explaining his bill. "Are you with the borrower or the lender?"
The senator said he wants to address the fact that brokers get paid based on how large an interest rate they can convince the borrower to take.
CRITICAL OF FED
Dodd has led a charge among lawmakers critical of the Federal Reserve Board which, he says, could have done more to curb damaging mortgage loans. He has previously talked about a mortgage reform bill that would make the Fed responsible for shielding more borrowers from predatory lenders.
He has criticized oversight of a complex mortgage finance system that, he said, dilutes responsibility for bad loans.
"Nobody has any skin in this game. They are passing the buck all the way along the process," Dodd said. Continued...
