"The bank has entered into a partnership with First Preferred Mortgage to offer refinancing incentives to a select group -- about 1,500 of its 11,200 mortgage customers.

That means Citizens gets an influx of cash and reduces its "balance sheet, which would increase its capital ratios or slow their decline," said Phillip van Doorn, senior banking analyst with TheStreet.com in Palm Beach Gardens, Fla.

Yates added the strategy appears unique.

"This is not something I'm aware of other banks doing," he said. "Basically, (Citizens is) saying 'go refinance to ... help us out.'"

On the same day that Treasury Secretary Tim Geithner was in downtown Washington calling on banks to boost lending, up on Capitol Hill the House Financial Services Committee passed an amendment to that would do just the opposite.

At an Obama administration summit on strengthening credit flows to small businesses, Geithner said “We need banks to be working with us, not against recovery." At the very same time on Wednesday, an amendment from Reps. Brad Miller and Dennis Moore would allow the FDIC to impose a 20 percent haircut on all secured creditors, including the 12 Home Loan banks, when resolving systemically important institutions that fail.

Costanera Center sits half-finished at the heart of Santiago’s financial district, its exposed concrete and reinforcement bars contrasting with the glass-faced skyscrapers surrounding it. A banner at the silent, empty building site says “Icon of Latin American development.”

Once a symbol of Chile’s soaring copper-driven economy, the stalled project became an emblem of its decline after work ground to a halt in January on what would be South America’s tallest building.

The California Assembly is considering AB 1588, which would implement the Monitored Mortgage Workout (MMW) Program.

MMW would provide for state-appointed monitors to guarantee homeowners a chance at working out a plan with their lender to avoid foreclosure.

If and when the Federal Reserve moves out of the mortgage backed securities field -a move expected in the first quarter of 2010-, will private investors step in? Well, why should they? What profit can they expect to reap? US housing prices have been kept artificially high for at least the past two years (if not the past 70) by the combination of the Fed's recent $1.25 trillion MBS purchases and the aggressive securitization policies of Fannie Mae, Freddie Mac and the FHA/Ginnie Mae team.

But this can't go on forever. As the Washington Post says, the government has lost its "huge federal gamble on the politically popular cause of homeownership". And the administration may try to paint rosy and green pictures of an economic recovery, and the stocks markets may seem to be doing relatively well, but none of it means a thing with the housing market in a death spiral.