Dodd said he will hold hearings next week on the measure aimed at providing cheaper mortgages backed by the government, The Washington Post reported Saturday.

The Connecticut Democrat's proposal would allow the Federal Housing Administration to encourage lenders to forgive a portion of a loan and issue a more affordable mortgage that would be backed by the federal government.

A similar proposal introduced by House Financial Services Committee Chairman Barney Frank is pending in the House.

He and Dodd said they hope to have a vote on the plans in their respective chambers by the end of May.