Ok, wow. I don't mean to scare you, but your wife is in DEEP if she is proclaiming to him she loves him. There are emotional affairs and there are the ones that are dangerous and your wife's EA falls in that camp, totally. So you need to tackle this quickly.
she told him that she loved him with the same deep love as for me, after reading the live posts, I texted her that I love her thru her phone, knowing she was busted. she called me and I told her I was reading there posts, she said it was only a game she was playing
Bullsh-t. There is NOTHING about a game that includes "I love you." that is one of the dumbest excuses ever.
The fact that you told her you saw the conversation means she's going to start hiding it better because she definitely hasn't cut it off despite saying as shown by example here:
she said she wouldnt talk to him anymore
she did message him on facebook the other night when i was out working late
The affair is still happening. Know that.
dont know whats going to happen when she brings it up about him coming to visit her mom. I really dont want him in my house.
Um. WHAT??!! He doesn't get to go to your house. You make that very clear to him. You have got to be crazy to even be entertaining that.
Also, do you know why his marriage ended? Did his wife leave him because he cheated on her w/ your wife???
Time to man up! Don't be a doormat. You tell her under NO uncertain terms: You are fully aware she has not ended all contact w/ him and you will NOT live in a open marriage. That if she cant' adhere to that, then you will take approp. actions including up to and filing for divorce. Then you have to follow through.
Being weak aned sad and crying about why won't she cut it off with him -- is going to work against you so DO NOT do that. You need to do this today.
I'd also call him up and tell him to stay the f away from your wife. He sounds like a jerk.
The longer you wait to do the above, the worse for you and your marriage.
If she won't cut it off, you have to decide if you want to live in a marriage where your wife doesn't respect you and has affairs openly. (It's open now since you discovered it and called her out on it).