September 04, 2007

Statement by Chairman Chris Dodd in Response to Regulators’ Guidance on Loan Modifications

“Today’s statement by the financial regulators comes very late and only underscores the failure of this Administration over a period of years to protect homeowners from predatory lending practices. In fact, several months ago, I convened a homeownership preservation summit, at which lenders, servicers, and Fannie Mae and Freddie Mac agreed to take affirmative steps to prevent foreclosures and preserve homeownership. “Not only is today’s statement late in coming, but it will not in and of itself ensure that as many people as possible remain in their homes. As I have said for many months, subprime homeowners deserve loans that are affordable in the long-term. We cannot tolerate short term modifications that put off the day of reckoning until a time when the press’ attention is turned elsewhere. Lenders and servicers must modify loans for long-term affordability. “The Administration and regulators must now lend more than their voice to this effort -- they must bring the full powers of their agencies to bear to make sure subprime servicers are doing modifications to save American homeowners from foreclosure.”
The full text of the principles and complete information on Chairman Dodd’s Homeownership Preservation Summit are available here.