Government

California Attorney General Edmund G. Brown Jr. forced two foreclosure rescue firms to close their doors this week and secured a court judgment that prohibits the three principal individuals involved from ever again working in the real estate industry. Brown also recovered more than $1 million in restitution for victims he says were left with ""false hope"" after paying upfront fees for loan modification services that were never delivered.

The Home Affordable Modification Program (HAMP) will fall far short of the administration's promise to prevent foreclosure for 3 to 4 million homeowners, according to one federal watchdog. Neil Barofsky, special inspector general for the Troubled Asset Relief Program, says HAMP's disappointing results have raised questions about the program's effectiveness. He's determined that Treasury has set targets that aren't ""meaningful"" and that HAMP is ""particularly vulnerable to re-defaults.""

The Association of Community Organizations for Reform Now (ACORN) said Monday that it is closing down its operations. The organization's board, over the weekend, decided to dismantle the 40-year old grassroots activist group. ACORN's exit comes after Congress cut off the organization's federal funding and it began to experience trouble raising funds and donations, following a widely publicized scandal involving members posing as pimps and prostitutes, hidden cameras, and questionable ""advocacy.""

PMI Mortgage Assurance Co. (PMAC) has been approved by Freddie Mac as a direct issuer of mortgage guaranty insurance. Pursuant to Freddie Mac's approval, PMAC may write new mortgage insurance business in certain states in the event that MIC is required to cease operations in those states due to its inability to meet applicable regulatory capital requirements.

Homeowners in Washington are suing Bank of America, alleging the nation's largest lender is intentionally thwarting borrowers' requests to make loan modifications that would prevent homes from being foreclosed. As of the end of February, Bank of America had permanently modified nearly 21,000 mortgages under the Home Affordable Modification Program. Attorneys for the plaintiffs in the suit say BofA has made an affirmative decision to slow the loan modification process for reasons that are solely in the bank's financial interest.

On Tuesday, Lenders Asset Management Corporation (LAMCO) announced the company's approach to help mortgage servicers fully comply with the federal government's Home Affordable Foreclosure Alternatives (HAFA) program, set to take effect April 5. In efforts to respond in a timely fashion to the inevitable influx of short sale requests expected as a result of HAFA, LAMCO says it is prepared to execute accelerated short sale transactions through its quality management system.

Together, Fannie Mae and Freddie Mac guarantee nearly half of all outstanding mortgages in the United States. They are the very epitome of ""too big to fail,"" and indeed when the housing market came tumbling down and Fannie and Freddie were on the brink of collapse themselves, the government immediately stepped in, shelling out more than $125 billion in taxpayer dollars to cover their losses. Although the nation's housing recovery is still fragile at best, the burning question on everyone's tongue is, ""What do we do with them now?""

Regulators seized control of seven more community banks over the weekend - three in Georgia, and one each in Alabama, Minnesota, Ohio, and Utah. That brings the FDIC's failed bank list to 37 for the year.

Since the new Real Estate Settlement Procedures Act (RESPA) changes took effect at the beginning of the year, a number of title firms have rolled out their own rate calculators to help lenders compute the Good Faith Estimate (GFE) for HUD transactions. While improved technology is a key factor to providing the type of title work that aligns with new RESPA compliance, Advantage Title Company warns that ""not all technology is good technology,"" and says GFE calculators are ""exactly what the industry needs to avoid.""

Chase announced Monday that it will provide additional help to struggling homeowners by joining the second-lien program under the administration's Home Affordable Modification Program (HAMP). Known as 2MP, the second-lien modification program is designed to work in tandem with HAMP to lower homeowners' payments on both their first and second mortgages. Qualified homeowners may see the interest rate on their second lien reduced to as low as 1 percent for five years.