Dodd denies mortgage wrongdoing

The Democratic senator from Connecticut repeats that he received no special treatment from Countrywide Financial Corp.

June 23, 2008: 4:04 PM EDT

DANBURY, Conn. (AP) -- Sen. Chris Dodd said Monday that the controversy over two loans he received will not compromise his ability to lead Congress' efforts to ease the subprime mortgage meltdown.

Dodd, D-Conn., chairman of the Senate Banking Committee, also repeated that he received no special treatment from Countrywide Financial Corp. (CFC, Fortune 500) His comments came before a speech to the Greater Danbury Chamber of Commerce.

"No. I don't think so at all," Dodd told The Associated Press, when asked if the mortgages he received would affect his high-profile role in seeking to stem the nation's housing foreclosure crisis.

Conde Nast Portfolio's Web site first reported more than a week ago that Countrywide made two loans at special rates to Dodd in 2003 to refinance homes in Washington and East Haddam, Conn.

The loans were reportedly part of a "V.I.P." program that gave preferential rates to "friends" of the company's chairman and chief executive, Angelo Mozilo. Several other notable politicians were participants in the program, the magazine said.

Dodd said on Monday that he and his wife refinanced their homes like millions of Americans did at the time and got a "market rate."

Dodd said he would have "walked away from it in a New York minute" if he had believed he was getting a special deal from Countrywide, a leading subprime lender at the center of the mortgage meltdown.

Portfolio, however, reported that the mortgage program participants got deals that were better than those available to ordinary borrowers.

The magazine said Dodd got a 4.25% interest rate on a $506,000 refinancing loan for his Washington town house, and a 4.5% rate on the $275,000 loan on his East Haddam home.

A large bipartisan coalition in the Senate last week beat back Republican efforts to gut legislation drafted by Dodd's Banking Committee calling for a massive foreclosure rescue.

The package includes $4 billion to help states buy and rehabilitate foreclosed properties, and would have government-sponsored mortgage giants Fannie Mae and Freddie Mac (FRE, Fortune 500) pay for the rescue.

House and Senate Republicans voiced reservations about the bill in light of the mortgage allegations against Dodd and others.

Dodd told the Chamber of Commerce on Monday that the housing crises, particularly increasing foreclosures, are at the heart of the nation's economic problems.

"This cannot go on," he said. "We've got to step up to do something to stem this hemorrhaging."