Subprime lenders got some explaining to do
TEXT OF STORY
SCOTT JAGOW: Today, Congress shines its spotlight on the home lending industry. There’s a House hearing this morning. A Senate hearing tomorrow. John Dimsdale reports from Washington.
JOHN DIMSDALE: Democratic presidential candidate Senator Christopher Dodd of Connecticut says he’s concerned by reports that more than two million subprime mortgage holders are facing foreclosure.
Dodd also chairs the Senate Banking Committee. He’s called on executives from the top five subprime lending companies and from three federal bank regulators to come and answer some questions.
SEN. CHRISTOPHER DODD: The regulators, I want to know, what did they know, when did they know it and what have they done about it. They have a responsibility as a cop. The lender has a responsibility, a fiduciary responsibility to people they’re gonna engage in. And the consumer has a responsibility.
Lenders are wary of a regulatory overreaction to the bad loans in the subprime mortgage market, but Dodd says so far he’s only out to enforce existing rules on credit checks for home buyers.
Some lawmakers say it may take a federal bailout to keep subprime borrowers from losing their homes.
In Washington, I’m John Dimsdale for Marketplace.
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