WASHINGTON — Sen.  Christopher Dodd says there was nothing special about the 2003 mortgages on his two homes, and that he requested no preferential treatment from his lender. But it might take more than a short denial to get past this week's reports that he was one of several prominent politicians given deals by Countrywide Financial Corp. on their home loans.

home loan adjustable rate CONNECTICUT SEN. Chris Dodd, left, banters Monday with Jon Stewart, host of Comedy Central's "The Daily Show." Stewart has frequently made fun of Dodd's low
numbers in the polls on presidential candidates, and he did so again with the Democratic hopeful as his guest.

"As a United States senator, I would never ask or expect to be treated differently than anyone else refinancing their home," Dodd said, "This suggestion is outrageous and contrary to my entire career in public service."

Dodd is chairman of the Senate banking committee — the group that regulates the mortgage industry and has been trying to fix the ongoing housing troubles. Dodd and other banking committee Democrats wrote to the Federal Reserve chairman last year, singling out Countrywide and calling its loans "abusive."

In 2003, Dodd and his wife, Jackie Clegg, signed for about $780,000 in refinanced mortgages on their home in East Haddam and their Washington townhouse. According to Conde Nast Portfolio magazine, the lender, Countrywide, waived some up-front costs and helped structure the loans for the best available mortgage rates: 4.50 percent and 4.25 percent. The rates, lower than what the Dodds had originally locked in, would ensure thousands of dollars in savings over the 30-year life of the loans. It's unclear whether Dodd was made aware of any special treatment.

The early reports of Countrywide's "V.I.P." practices — linked to its CEO, Angelo Mozilo — emerged in the Wall Street Journal and cost James Johnson, head of the vice presidential search committee for Sen. Barack Obama, his campaign job. The Thursday story in Portfolio presented another pack of prominent officials allegedly given special deals, with Dodd's name at the top of the list.

Countrywide did not return a request for comment Friday.

According to Dodd: "When my wife and I refinanced our loans in 2003, we did not seek or expect any favorable treatment. Just like millions of other Americans, we shopped around and received competitive rates."

That assertion appears to be backed by news accounts then. The financial editor of "The Today Show" reported in June 2003 that the going rate for the five-year ARM loan was about 4.2 percent; a Miami Herald article from that month suggested those seeking a similar loan should be able to "lock in about 4 percent interest"; and a CNNfn interview that month put the typical rate below 4 percent.

Tim Malburg, president of Capstone Mortgage Co. in Wilton, said, "The rate is not a red flag. That kind of rate did exist." But — on the question of Dodd's knowingly receiving a bargain — it would be "virtually impossible to prove."

"What bothers me about this is it seems that preferential treatment is not being given to the credit-worthiness of the loan, but preferential treatment is being given to the political clout of the borrower," Malburg said. "It opens up questions of influence-peddling. It opens up questions of discrimination."

Even if it isn't proved that Dodd secured extra benefits from the massive mortgage firm, he's in a tricky position to easily deflect such accusations, and the story arrives with particularly difficult timing.

If he had any designs on the vice presidency, a story such as this could hurt his chances just as the search gets serious. Also, Dodd's adjustable-rate loans came from a firm often held up during today's mortgage crisis as a poster company for predatory and reckless lending practices.

If Dodd did knowingly accept a special deal, Countrywide and the mortgage industry certainly didn't benefit this year, as Dodd argued a number of mortgage industry fixes that were geared toward helping out borrowers and sticking lenders with losses.

Even before the subprime lending crisis hit bottom, Dodd called for executives of Countrywide and four other lenders to come to explain their lending practices at a March 2007 hearing that detailed industry abuses. At the hearing, he talked about adjustable-rate mortgages forcing borrowers into a "devil's dilemma."

Sen. Kent Conrad, D-N.D., was also included in Portfolio's story as somebody who received the preferential treatment, along with two former presidential Cabinet members and a former U.N. ambassador. Conrad, the powerful chairman of the Senate budget committee, made energetic statements on Friday that he's never met CEO Mozilo, has never done anything for the company, and had no intention of seeking special benefits.

"It's not something a senator wants to get involved with when his constituents are clawing their way out of so many different mortgage situations," said Tobe Berkovitz, associate dean of the college of communication at Boston University, and a longtime political consultant who's worked extensively in Connecticut. "It certainly doesn't help your reputation as a senator of the people."

A situation like this, he said, has "the reality and the perception." And the two might not match up, especially in our "continually poisonous political environment." For most people, Berkovitz said, the perception reigns.

"Did the senator get a special deal from people who right now are being questioned about their loan practices? That's your bottom line." Even if it were legal, Berkovitz said Dodd's not off the hook.

"There's a perception here of preferential treatment," echoed Gary Rose, chairman of the department of government and politics at Sacred Heart University. Because so many people are struggling with mortgages, and Dodd is the chairman of the committee that's supposed to help, the issue is "even more contentious."

"I think the senator is obviously going to have to explain himself," Rose said, arguing that a four-sentence statement isn't enough. "It's going to have to go a little deeper than that."

It may already jeopardize a goal that it's unclear Dodd is after. As one of the leaders of the Senate — fresh from the prominence of his own bid for the Democratic presidential nomination — Dodd's name is often raised in conjecture about possible vice presidential candidate picks.

This "reduces his chances," Rose said.

In the arena of campaign contributions, Countrywide has not been a major help for Dodd, not even close to the top of his long list of investment and mortgage banking contributors.

Rose said the fallout from this mortgage story will depend on how big it becomes with the media and public. But, in the end, he said, "It won't cost him his seat in the Senate. He really is a household name. He's got such a safe seat."

But without further answers, and with groups like the Citizens for Responsibility and Ethics in Washington already calling for congressional ethics investigations, is this the kind of question that could linger in Dodd's public life?

Berkovitz's prediction: "If there's no smoking mortgage, this will be pushed out of the media by the middle of next week."

An Associated Press report was included in this story.

Contact Jessa A. Hamilton at jhamilton@courant.com.