) - Here's the news and headlines that could drive action in bank stocks today.

Bank of America

(BAC) - Get Report

said Thursday that it is launching a pilot program that would allow select mortgage customers facing foreclosure the option to stay in their homes by converting them into rentals.

The program, called "Mortgage to Lease" will be on a solicitation basis- meaning customers cannot apply for consideration. The bank will invite fewer than 1000 customers in Arizona, Nevada and New York in the first phase of the pilot.

The borrowers will transfer title to their properties to the bank and have their outstanding mortgage debt forgiven. In exchange, they may lease their homes for upto three years at or below current market rates, such that their rent will be lower than their mortgage payment.

The program if successful could expand into a broader program that could potentially involve investors who would purchase homes at predetermined prices and keep the borrowers in their homes.

Fannie Mae recently began selling foreclosed properties in bulk to private investors who wish to convert them into rental units.

"Our priority is designing a solution that helps our customer," said Ron Sturzenegger. Legacy Asset Servicing Executive at Bank of America "If this evolves from a pilot into a more broadly based program, we also see potential benefits from helping to stabilize housing prices in the surrounding community and curtail neighborhood blight by keeping a portion of distressed properties off the market."


(AIG) - Get Report

has repaid the U.S. Treasury's preferred invesment stake in full, with a final payment of an additional $1.5 billion. AIG was scheduled to repay the investment by May 2013.

The government's remaining outstanding investment is now $45 billion, which represents a more than 75 percent reduction from that original commitment.

"In the dark days of the financial crisis, when commitments to AIG totaled $182 billion, few would have believed that we'd already be able to reduce that amount by more than 75 percent, or that we may be able to recover every single dollar invested in the company," said Assistant Secretary for Financial Stability Tim Massad. "This demonstrates the significant progress that AIG and the government have made in restructuring the company's business so that it can repay taxpayers."

In a research report on Thursday, Berstein analyst Josh Stirling said that the sale of AIG's International Leasing Finance Corporation (ILFC) to a strategic buyer was now more likely given the "risk on" market, which meant "we're closer to an

Treasury exit than many think."

Friday brings economic data in the form of new home sales. Consensus expects new home sales to have risen to 325,000 in February, according to Bloomberg.

Federal Reserve

Chairman Ben Bernanke will deliver opening remarks at the Fed Conference on Central Banking "Before, During, and After the Crisis." Leading central bankers will debate the impact of their easy-money policies.

Bernanke returned to school this week with a series of lectures on the financial crisis and the role of the Fed.

--Written by Shanthi Bharatwaj in New York

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