HARTFORD, Conn.--Senate Banking Committee Chairman Chris Dodd, whose two mortgages with a troubled lender are under a Senate ethics investigation, said Monday he will refinance them.
Dodd said he sought no special treatment from Countrywide Financial Corp., when he refinanced his Washington and East Haddam, Conn., homes in 2003. Dodd has acknowledged participating in a VIP program at Countrywide, which he thought referred to upgraded customer service, not reduced rates.
"Knowing what I know now, I regret having ever done business with Countrywide," Dodd said.
The bank, a leading subprime lender at the center of the mortgage meltdown, was sold to Bank of America Corp. (BAC) last year and has been the focus of allegations that it gave favorable loan terms to lawmakers.
Dodd, a five-term Democrat, said he's switching the loans to a new bank because he was wrongfully labeled a friend of Countrywide's former CEO, Angelo Mozilo.
"Let me be very clear. We are not friends of Angelo Mozilo and we have never been a friend of his," said Dodd, who was accompanied by his wife, Jackie, at a news conference. "The first we ever heard of the 'friends of Angelo' list was through press reports last summer."
Dodd, whose committee has oversight over the mortgage and banking industries, faced heavy criticism in his home state for not releasing details of his mortgages when the controversy erupted last year.
Dodd said Monday he received a $275,000 30-year, adjustable rate loan at 4.5% interest for his East Haddam home. The Washington home was financed with a 30-year adjustable loan of $506,000 with a 4.25% rate.
The terms of the mortgages are under investigation by the Senate Ethics Committee.
"I just wanted to put this behind us," said Dodd, speaking to reporters in his Hartford office.
A third party will be involved in choosing the bank for the new loans, he said.
Dodd said he has turned over documents and answered written questions, but has not been called to testify before the Senate committee investigating the loans , Dodd said.
Dodd played a key role in crafting the $700 billion Wall Street rescue plan, which allows the government to spend billions of dollars to buy bad mortgage-related securities and other devalued assets from troubled financial institutions.
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