Government

Wells Fargo made a decision to terminate company employees with past criminal records involving dishonesty or breach of trust to comply with , the bank announced Thursday. The decision to terminate team members over criminal matters that occurred prior to their employment with Wells Fargo may seem tough we recognize that these situations are difficult for everyone involved but laws and regulations related to the employment of bank employees are designed to protect the interests of all consumers who put their trust in financial service companies, Wells Fargo said in the statement.

Freddie Mac said Thursday that its board of directors has selected Donald H. Layton to serve as the company's new CEO. Layton will join the GSE on May 21, and will also have a seat on the board of directors. In October 2011, the Federal Housing Finance Agency announced that Charles E. Haldeman, Jr. had informed Freddie Mac's board of his desire to step down within the year. Haldeman served as the GSE's CEO since August 2009. Layton has had a long career in the private banking and financial services sectors. He worked for nearly 30 years at JPMorgan Chase and its predecessors and more recently, served as chairman and CEO of E*Trade Financial.

Starting June 1, military homeowners who are permanently displaced by a job-related move may still be able to be considered owner-occupants when applying for the Home Affordable Modification Program (HAMP). This change means more people could become eligible for the government's modification program to assist struggling homeowners.

Fannie Mae said Wednesday that it brought in $2.7 billion dollars in net income during the first quarter of this year, and for the first time since it was seized by the government in September of 2008, the company does not need a draw of taxpayer funds from Treasury to get out of the red. Fannie Mae says its improving numbers can be traced to lower credit-related expenses as the decline in home prices slowed and the company shed some of its REO holdings.

According to Freddie Mac's first quarter refinance analysis, 79 percent of homeowners who refinanced their first-lien mortgage either maintained or reduced their mortgage debt. Of these borrowers, 58 percent retained about the same loan amount, which is the highest level reached in the 26-year history of the analysis, while 21 percent managed to reduce their principal balance.

Solvency issues re-emerged for the Federal Housing Administration in a hearing convened Tuesday by the Senate Banking Committee, with HUD Secretary Shaun Donovan calling for lower loan-to-value thresholds and more servicer competition to expand refinance opportunities. The hearing quickly turned to servicer competition, which the HUD official said is lacking in part because of strict underwriting guidelines under Fannie Mae and Freddie Mac, inflating home prices and keeping refinance opportunities out of reach for many homeowners.

Due to one important adjustment, Fannie Mae and Freddie Mac might start accepting funds to be applied toward principal reduction in California. The Keep Your Home California program once required participants in its principal reduction program to match funds it provided towards reducing principal. Recently, housing finance agency officials from the state announced a decision to no longer require lenders to match the funds the program provides, the L.A. Times first reported.

Bank of America began mailing out more than 200,000 letters this week targeting borrowers thought to be eligible for principal-reducing modifications under terms of the settlement reached with the federal government and 49 state attorneys general. To be eligible, a homeowner must owe more on the mortgage than the property is worth today and must have been at least 60 days behind on payments on January 31, 2012. BofA estimates average monthly savings of 30 percent for qualifying customers.

Clarification was offered Monday on misconceptions regarding the REO-to-Rental Initiative, currently in pilot stages. Meg Burns, FHFA's senior associate director for housing and regulatory policy, explained in testimony to lawmakers the purpose and intent of the pilot program, which involves the bulk sale of Fannie Mae REO properties to investors who will then convert their purchases into rental units. Burns made it clear that the program is highly targeted for select markets that have specific characteristics including an oversupply of single-family homes for sale and a strong demand for rental housing.

The expectation for home prices and the percentage of those who think the U.S. economy is on the right path reached record all-time highs in Fannie Mae's April 2012 National Housing Survey. Americans continue to expect home prices to go up, with the projection averaging 1.3 percent over the next 12 months, the highest value recorded. The percentage of Americans who believe the economy is on the right track rose to 37 percent, a 2 point increase from the previous month and the highest level in the survey's two-year history. Still, an even greater 56 percent believe the economy is moving in the wrong direction.