After the housing market went bust, the FHA became the major source of funding for first-time homebuyers. But the agency, which insures roughly 30 percent of new loans, has seen its losses rise dramatically. While the agency has avoided a taxpayer rescue so far, its reserves have sunk below the minimum level required by Congress.

There also have been fears that subprime lenders have shifted their business to the FHA after the subprime business went bust.

The agency has already taken action against several problem lenders. One of the nation’s biggest mortgage bankers, Taylor, Bean & Whitaker Mortgage Co. of Ocala, Fla., was banned from the FHA program in August and filed for Chapter 11 bankruptcy protection. Another mortgage company, Lend America, was kicked out in November.

On Tuesday, Department of Housing and Urban Development’s inspector general, Kenneth Donohue, said he wanted to determine why defaults are so elevated among the 15 companies being probed and whether any have committed fraud.

“Many of these target loans didn’t last but a short time before defaulting,” Donohue said. “We will conduct an investigation, if appropriate, to determine who is responsible and will recommend that appropriate action be taken against individuals and corporations.”

The FHA does not make loans, but rather offers insurance against default. Borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price.

The lenders targeted by FHA officials include some of its worst-performing active lenders. For example, almost one in five loans made by Alethes LLC of Lakeway, Texas, over the past two years went into default, compared with a national average of about 5 percent.

“We are reviewing each of these files to determine what commonalities there are, if any,” said Danny Smith, president of Alethes, wrote in an e-mail. He later added that the subpoena requested “information which has already been provided.”
Two other FHA lenders being scrutinized, Alacrity Lending Co. of Southlake, Texas and Pine State Mortgage Corp. of Atlanta, each had default rates of about 15 percent.

“We intend to comply and get as much information to them as fast as we can,” said Lonnie Brantley, chief executive of Alacrity.

The government inquiry, he said, applied to a small portion of the company’s loans, and attributed the company’s high default rate to “bad economic times.”

Pine State Mortgage could not be immediately reached for comment and the company’s Web site was down Tuesday afternoon.

The largest lender under the FHA’s magnifying glass was First Tennessee Bank, a subsidiary of Memphis, Tenn.-based First Horizon National Corp. A spokesman said the company sold its mortgage division in August 2008 and scaled back dramatically on new FHA loans since then. That could be artificially inflating the company’s default rate because the company is making fewer new FHA loans.

The crackdown was welcomed by John Courson, chief executive of the Mortgage Bankers Association. “We’re concerned about the viability of the program and we want to make sure that the bad apples and the bad players, frankly, are eliminated,” he said.

If you are an illegal immigrant and are married to a U.S. citizen or legal permanent resident and have been a victim of abuse, you may be able to get help.

If you’ve been the victim of emotional, verbal, physical, or sexual abuse at the hands of your spouse, you may qualify for immigrations benefits or a valid work authorization. Under The Violence Against Women Act, abused immigrants may obtain permanent residency and other immigration benefits that will allow them to leave their abusive situation.

For more information about free and confidential legal services call the Texas Civil Rights Project’s VAWA Program at 1- 888-364-8277.

NJ Supreme Court says bail can be higher for illegal immigrants

The state Supreme Court has ruled that county prosecutors may seek bail increases on illegal aliens charged with crimes who they believe face imminent deportation.

In a unanimous ruling by the state’s highest court, the opinion sanctioned the actions of the Morris County Prosecutor’s Office in January when it asked for, and received from a Superior Court judge, a bail increase from $75,000 to $300,000 for Manuel Fajardo-Santos. Fajardo-Santos, an illegal alien from Honduras, was charged in August 2008 with molesting a child in Wharton.

Bail was set at $75,000, and the complaint against him stated there was reason to believe he was here illegally. But it wasn’t until Dec. 18 that the federal Immigration and Customs Enforcement lodged a detainer against him at the county jail, which indicated they wished to start deportation proceedings against him.

Woman pleads guilty to running marriage immigration scheme

DALLAS (AP) – A 71-year-old woman accused of recruiting family members to marry foreigners seeking green cards pleaded guilty Wednesday to taking part in an immigration fraud conspiracy.

Federal prosecutors say Maria Refugia Camarillo of Fort Worth faces five years in prison and a $250,000 fine when she is sentenced in September. She also must provide a $35,000 lien on her home.

Investigators said that from the 1980s until last year, Camarillo and others ran a scheme in which U.S. citizens would marry foreigners willing to pay up to $12,000. Once married, the U.S. citizen could petition for their foreign spouse to receive U.S. permanent residence, also called a green card, and later U.S. citizenship.

Citizenship for Permanent Residents

You may be eligible for naturalization if you have lived in the United States for at least 5 years as a permanent resident or 3 years if married to and living with a U.S. citizen (if you meet all eligibility requirements to file as a spouse of a U.S. citizen).

How long can an alien be in H-1B status?

Under current law, an alien can be in H-1B status for a maximum period of six years at a time. After that time an alien must remain outside the United States for one year before another H- 1B petition can be approved.