March 19, 2007 / 8:51 PM / 13 years ago

Top five subprime lenders asked to testify: Dodd

WASHINGTON (Reuters) - U.S. Senate Banking Committee Chairman Chris Dodd said on Monday he asked executives at five big subprime mortgage companies to testify at a Thursday hearing and explain their lending practices.

Executives from HSBC Holdings Plc (HSBA.L), New Century Mortgage Corp. NEWC.PK, Countrywide Financial Corp. CFC.N, General Electric Co.’s (GE.N) WMC Mortgage unit and First Franklin Mortgage were invited to testify, Dodd, a Connecticut Democrat, said in a statement.

Officials with the Federal Deposit Insurance Corp., the Federal Reserve, the Office of the Comptroller, and the Conference of State Bank Supervisors also were asked to testify.

“At the very least, homeowners facing foreclosure deserve to know what factors contributed to their dire financial straits, and what steps are needed to fix this pressing problem,” Dodd said.

Dodd is a candidate for the U.S. presidency.

A spokeswoman for HSBC declined to comment on whether a company executive would testify. Representatives from Countrywide; New Century; and First Franklin, which was recently acquired by Merrill Lynch MER.N, were not immediately available for comment.

A spokesman from GE Money, a WMC parent, declined to comment.

The subprime market is the riskiest segment of the U.S. mortgage market and serves borrowers with poor credit histories. It has seen rising default rates in recent months amid falling prices and slower sales in the housing market.

At least 20 lenders in the subprime mortgage sector have gone out of business as a result.

Dodd has said that regulators bear some responsibility for the recent downturn in the subprime mortgage market, vowing to bring them before the Senate panel to explain how the subprime market has arrived to this point.

Thursday’s hearing is one of two congressional hearings scheduled for this week and next. The House Financial Services Committee will hold a hearing on subprime and predatory lending on March 27.

Rep. Barney Frank, a Massachusetts Democrat who chairs the House committee, said last week he plans to introduce legislation to restrict future subprime lending.

Additional reporting by Dan Wilchins and Jonathan Stempel in New York

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below