Dodd to Push FHA Reform to Aid B&C Market

Senate Banking Committee Chairman Christopher J. Dodd, D-Conn., said Friday that he plans to move "aggressively" to pass Federal Housing Administration reform legislation when Congress returns in September so that the FHA can help more subprime borrowers refinance into safer and more affordable mortgages.During a conference call with reporters, the committee chairman also applauded the Federal Reserve's actions to calm the financial markets (see item below). But he was highly critical of the Office of Federal Housing Enterprise Oversight's decision to block Fannie Mae and Freddie Mac from providing liquidity in the mortgage markets. The Democratic presidential candidate called on President Bush to show "leadership" in dealing with the "mortgage crisis" by lifting the caps on Fannie's and Freddie's portfolios. Sen. Dodd noted that he is considering legislation to address abusive lending practices (such as prepayment penalties) and the regulation of mortgage brokers. "Strong legislation may be necessary," he said. He also plans to hold hearings to examine the role the credit rating agencies played in the subprime debacle.