Financial Roundup: New Flexibility on Mortgages, Country Clubs, Too?, Payout at Lehman, Ex-Merrill Prez Jumps Ship, and More

(MoneyWatch)  Moves lighten up on mortgages -- Citigroup has reached a deal with Senate leaders to let bankruptcy judges modify terms of home mortgages. Also, Fannie Mae has a pilot program that would allow homeowners to sell their houses for less than the existing value of their mortgages with the rest forgiven. [Sources: The Washington Post, The Wall Street Journal]

Bailout money goes for country club memberships: The Treasury Department will be taking heat from a scathing congressional study showing little accounting for the $700 billion bailout. One example: Hampton Roads Bankshares. It got $80.3 million in taxpayer bailout money of which some $975,000 went as signing bonuses for two executives plus extra for country club memberships. [Source: Footnoted.org]

Lehman exec quietly gets big payout -- Many banking officials are falling on their swords and not taking bonuses this year. One exception is Hugh "Skip" McGee III, the elusive head of the defunct Lehman Brothers' investment arm. He managed a $25 million parachute. [Source: DailyBest.com]

More signs of culture clash -- Button-down Bank of America is finding more freer-wheeling Merrill Lynch execs jumping ship. The latest is Greg Fleming, Merrill's former president, who will teach at Yale. [Source: Charlotte Observer]

Finally, good news for hedge funds -- It's been a bloody year for hedge funds which have seen a full-year loss of 18.3 percent. The cheerful news is that the industry closed out 2008 with gains of 0.4 percent to 0.5 percent for December. [Source: TheStreet.com]