Chris Dodd: “today we are facing a crisis in the mortgage markets on a scale that has not been seen since the Great Depression: over…”

“today we are facing a crisis in the mortgage markets on a scale that has not been seen since the Great Depression: over 2 million homeowners face foreclosure at a loss of over $160 billion in hard-earned home equity; the Conference of Mayors recently reported, November 26, 2007, that they expect a decline of $1.2 trillion in property values in 2008 because of the crisis; over one out of every 5 subprime loans is currently delinquent according to First American Loan Performance, an industry research firm. These high default rates have frozen the subprime and jumbo mortgage markets and infected the capital markets to the point where central banks around the world have had to inject liquidity into the system to avoid the crisis from spreading to other segments of the market. One of the fundamental causes of this serious crisis is abusive and predatory subprime mortgage lending. The Homeownership Preservation and Protection Act of 2007, which I am introducing today with a number of my colleagues, is designed to protect American homeowners from these practices, and prevent this disaster from happening again.”