Government

Daniel Mudd, former CEO of Fannie Mae, has received a Wells notice from the Securities and Exchange Commission (SEC) regarding his service with the GSE. A Wells notice informs the recipient that the agency is considering legal action against him. The recipient may elect to respond to the Wells notice with arguments and counter-evidence, and Mudd is reportedly planning a rebuttal. On the heels of Mudd's Wells notice comes the news that lawmakers are preparing to introduce bills as early as this week to accelerate the wind-down of the GSEs.

Following last week's statement by Bank of America CEO Brian Moynihan that principal reductions are unfair and not in everyone's best interest, more banks and even some attorneys general have spoken out against the controversial clause in the settlement proposal. Wells Fargo CEO John Stumpf voiced his disapproval of principal write-downs, saying such provisions would entice people to default on their loans. Some attorneys generals said they feel write-downs would force servicers to break their contracts with investors.

The Federal Housing Finance Agency (FHFA) has pushed the cut-off date for the Home Affordable Refinance Program (HARP) out by a year. HARP allows homeowners with a mortgage owned by Fannie Mae or Freddie Mac who owe more than the home is worth obtain a new loan at today's lower interest rates. The program was originally set to expire on June 30, 2011. FHFA has now extended the program through June 30, 2012.

The California Association of Realtors (CAR) sought to bring attention to what the organization describes as the state's ""ineffective"" short sale process Thursday by placing an open letter advertisement in California's seven largest daily newspapers. The letter, signed by CAR president Beth L. Peerce, called on lenders and industry regulators to streamline and improve the short sale process.

The first full week of March saw no bank shut-downs, but that lull came to a quick end as regulators seized control of two community-based lenders Friday evening - First National Bank of Davis in Oklahoma and Legacy Bank in Milwaukee, Wisconsin. They bring the number of names on the FDIC's failed bank list to 25 for the 2011 calendar year.

Americans are beginning to gain ground against the worst recession in recent history as more and more economic indicators point to recovery. A new study from the Federal Reserve says household net worth in the U.S. soared $2.1 trillion during the last three months of 2010. The figures are a good sign for the mortgage market as it struggles to get a handle on delinquency numbers in the millions, provided the increased net worth translates into fewer homeowners who are unable to meet their mortgage obligations.

Senators and banks across the country are joining forces in order to provide mortgage protection for members of the military. After reports that some members of the military and their families are struggling to remain in their homes, senators announced an act to protect servicemembers from abuses. In a similar effort, two of the top servicers have announced plans to help protect members of the military from foreclosure and high credit costs.

On Friday the U.S. House voted to end the Emergency Homeowner Loan Program for borrowers who are unable to make their mortgage payments because of unemployment. The fund was established under the Dodd-Frank Act to provide interest-free loans to homeowners for up to 24 months while they look for new employment. This is the second House vote to end a foreclosure mitigation program that some lawmakers claim just isn't working. The bills are not expected to pass the Senate.

The U.S. House of Representatives has passed legislation to end the Federal Housing Administration's (FHA) Short Refi Program aimed at helping homeowners who owe more on the mortgage than their home is worth obtain a new FHA-insured loan with a reduced principal. In a 256 to 171 vote Thursday evening, the House approved the FHA Refinance Program Termination Act, the first of four bills targeting federal foreclosure mitigation programs.

More backlash from the 27-page proposed servicer settlement developed on Wednesday when representatives from the House Financial Services Committee voiced their disapproval and concern in a letter to Treasury Secretary Timothy Geithner. The letter, signed by committee chairman Spencer Bachus and four other members, was obtained by DS News on Thursday. It contains a page of questions the group wants answered, with a great deal of attention focused on principal write-down mandates.