Government

Citi announced Thursday that it has committed to participate in the administration's second lien modification program (2MP). The New-York based global financial services company is the fourth major servicer to sign on to the program, which was introduced nearly a year ago. Bank of America, Wells Fargo, and Chase have also agreed to participate in the program. Together, these four servicers own $400 billion of the nation's $1 trillion second lien mortgage market.

Members of the Pennsylvania Association of Realtors (PAR) rallied at the state Capitol Wednesday to voice their opposition to Gov. Ed Rendell's proposal to tax professional real estate services. Rendell has been on a push for several weeks now to drum up support for his new tax plan that would place a levy on goods and services that are currently exempt from the state sales tax, including services provided in the course of real estate transactions.

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.