Sen. Chris Dodd (D-Conn.) acknowledged Tuesday that Countrywide Financial informed him in 2003 that his mortgages would be designated as “VIP” accounts, but he denied that he received any unusual benefits from the lender.

“There was no red flag to me [that] we were getting special treatment,” the Senate Banking, Housing and Urban Affairs chairman said.

Countrywide officials allegedly conspired to provide special mortgages for a select group of “VIPs” that included both Dodd and Senate Budget Chairman Kent Conrad (D-N.D.), waiving fees and shaving thousands of dollars from loans for multiple properties.

The Connecticut lawmaker has vigorously denied any wrongdoing in the wake of reports first published by Portfolio.com last week.

“The idea of asking or seeking any kind of financial preference … is something I completely reject,” Dodd said at a press conference Tuesday.

But he went on to acknowledge that both he and his wife, Jackie, were notified in 2003 that “there was a VIP section we were in.”

Dodd, who at that time was refinancing both his Connecticut and Washington, D.C., homes, said he never asked for an explanation of that designation, nor did his wife.

“She thought it was basically a courtesy,” he said. Dodd said he assumed the “VIP” status was conferred on him because he already held one mortgage with Countrywide, issued in 1999 for his Washington, D.C., town house.

“We didn’t seek it,” Dodd said of the designation. He later added that he does not know Countrywide CEO Angelo Mozilo, who anointed many of those “VIP” loans.

“I may have met him at a reception, but I’ve never talked to him,” Dodd said.

Dodd said he received rates within the standard range of interest rates at that time, opting for 10-year and five-year adjustable rate mortgages for his two homes.

But according to Portfolio.com, which relied in part on internal Countrywide e-mails, the lender waived about $2,700 in costs for two loans to Dodd, while also allowing him to procure lower interest rates than initially available without charging additional fees for the service. The lower rates reduced the overall costs of the loans by about $58,000 and $17,000, respectively.

Dodd said he has no plans to refinance the loans elsewhere.

“We don’t believe we did anything wrong. We negotiated a mortgage,” Dodd said.

In the meantime, Conrad, who has reviewed internal Countrywide communications, acknowledged that he did receive special treatment from the lender, although he said he was unaware of the discrepancies until news reports published last week.

The North Dakotan subsequently announced Saturday that he will donate $10,500 to charity, an amount roughly equal to the fees allegedly waived by Countrywide officials when he refinanced his Bethany Beach, Del., vacation home in 2004 with a $1.07 million loan.

Conrad said he has since completed payment on that loan.

In addition, Conrad said he intends to refinance a second Countrywide mortgage issued for an eight-unit apartment building that he owns with his brothers in Bismarck, N.D. That loan was issued to the Senator despite company rules that limit such loans to buildings of four units or fewer.

Conrad said that in seeking out his home loans with Countrywide, he “certainly wanted the best rate I could get, but I never thought I was getting special treatment.”

He said he is particularly upset because at no time was he told that he was offered anything different from what was made available to other customers.

“I did not ask for it, I didn’t expect it and I didn’t think I was getting anything special,” Conrad said, later adding, “All of this came as a big shock to me.”

The North Dakotan said Tuesday that he has been in contact with the Senate Ethics Committee, which has a “process to go through” and that he “welcomes it very much.”

“I am eager to make my case,” Conrad said.

Dodd said he has not been in communication with the ethics panel, but “I’d be happy to turn over whatever they want.”

Asked whether the Ethics Committee will investigate the issue, a committee spokeswoman said only: “Any time a complaint is filed with the Senate Ethics Committee, we take a look at it.”

The Countrywide scandal is also threatening to spill over onto the Senate floor, with Republicans considering using it as leverage to force Majority Leader Harry Reid’s (D-Nev.) hand in the upcoming fight over mortgage legislation, GOP aides said.

According to senior Republican aides, one option being considered by GOP leaders would be to threaten the possibility of an investigation into the mortgage bill and its potential benefits to Countrywide as a way to force Reid to give Republicans more flexibility in the number and types of amendments they can offer on the measure.

Specifically, if Reid refuses to give in to GOP demands and, as has become standard practice this year, files cloture on the bill and “fills the amendment tree” to control the amendment process, Republicans would offer a motion to recommit the bill pending an investigation into what benefits Countrywide would receive.

Erin P. Billings and John Stanton contributed to this report.