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Friday, February 1, 2008

Senator Chris Dodd Puts New $20B subprime mortgage bailout on the table

February 1 2008
Senator Chris Dodd proposes setting up a fund that would buy defaulting subprime mortgages and restructure loans for borrowers. The proposal to bail out subprime mortgage borrowers who are at risk of foreclosure was floated at a Senate Banking Committee hearing Thursday. Senator Chris Dodd, the committee chair, said he is working to create a Home Ownership Preservation Corporation, which would purchase mortgage securities that are backed by at-risk, subprime loans from lenders and investors. This corporation would give these lenders and investors a better price for the securities than they would get if the properties backing them were put through foreclosure

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