Four senior regulators will take the hot seat this morning as the Senate Banking Committee convenes to discuss the troubled subprime mortgage market. (See related article here.)

Chairman Chris Dodd said he plans to use his hearing Thursday to grill banking regulators about why they did not act sooner to curb alternative mortgage products. (Read his opening statement here.)

"This crisis has been in the making for several years, and in my view, it has taken far too long for the regulators to act," the Connecticut Democrat wrote in letters sent Monday to the agencies scheduled to appear.

Officials from the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the Office of Thrift Supervision, and the North Carolina banking commissioner are scheduled to testify. (Read testimony from the OTS, OCC, FDIC, and the Fed.)

Lenders from four companies — HSBC Holdings, Countrywide Financial, WMC Mortgage and First Franklin — are also scheduled to testify. (Read invitation letter here.)

In his letter to regulators Sen. Dodd asked the agencies to detail their level of awareness and concern about the growth of certain nontraditional and subprime adjustable-rate mortgages, and about the role securitization played in the growth and development of these products.

"What was the origin, and evolution of the explosion in exotic mortgages and subprime hybrid ARMs?" he wrote. Sen. Dodd also asked for five years' worth of data on subprime and exotic mortgages, including volume, composition of the loan (such as option payment, hybrid, and interest-only ARMs), and whether the loans were used for refinances or first-time home purchases. The letters asked the regulators whether supervisory standards at the time were adequate and for records of any enforcement actions.

Check back after the hearing starts at 10 am for copies of Sen. Dodd's opening statement and testimony from the witnesses.

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