A bill introduced in Congress earlier this year by Rep. John Doolittle (R-Calif.) would require home buyers to have a social security number to obtain a residential mortgage for a primary residence.

The Doolittle legislation could derail the increasingly popular mortgage technique of allowing immigrants to use an individual tax identification number (ITIN) instead of a social security number to purchase a home.

ITIN loans are offered by many finance companies to undocumented immigrants who do not have a social security number. They can apply for the loans by obtaining an ITIN from the Internal Revenue Service.

The National Association of Hispanic Real Estate Professionals estimates that expanded use of ITINs could open up $44 billion worth of mortgages—much of it for first-time home buyers—business that would be lost if the legislation passes.

At press time, Doolittle's bill was referred to the House Committee on Financial Services, which is chaired by Rep. Barney Frank (D-Mass.).

Brian Jensen, district director for congressman Doolittle's office, says the likelihood is that the bill will be rolled into the general debate on immigration reform later this year.

However, Jensen says Rep. Doolittle introduced the bill because there is evidence that some people using ITINs are illegal immigrants.

“While it's [very difficult] to quantify the magnitude of the problem, the bill would only apply to people seeking a mortgage to purchase a primary residence,” says Jensen. “The bill would not affect foreign investors or the purchase of vacation homes,” he says.

Builder trade groups as well as the Hispanic Realtor group worry that the legislation could have unintended consequences.

“We have a lot of people in the Tampa Bay, Fla., area who come here from Canada to retire,” says Joseph Narkiewicz, executive vice president of the Tampa Bay Builders Association. “Does that mean they have to apply for a social security number or maintain dual citizenship to own a primary residence in this country?” he asks.

Tim Sandos, president and CEO of the Hispanic Realtors' trade group, says his concern is that millions of undocumented immigrants who are now paying taxes could be denied access to homeownership.

While he did admit that some immigrants with ITINs may have used a false social security number to originally secure work, Sandos says the bill unfairly penalizes people who have since reported their status to the government and are well into the citizenship process—a process that can take eight to 25 years.

Sandos says the issue surfaced when the Treasury Department's Office of Thrift Supervision (OTS) did audits and found that some customers using ITINs had used unauthorized social security numbers to find work. OTS then required the finance companies to file a suspicious activity report (SAR) with the Financial Crimes Enforcement Network, which makes the SAR available to the appropriate law enforcement agencies. A suspicious activity report can potentially subject an immigrant to a formal review that can lead to deportation by the Department of Homeland Security.

“This is completely unnecessary,” says Henry Cisneros, chairman of CityView and HUD Secretary during the Clinton administration. “We're seeing innercity neighborhoods revitalized by the entrepreneurial instincts of new arrivals who are turning around areas that haven't had new housing for 30 or 40 years,” says Cisneros, who adds that Doolittle's bill would stifle such efforts.

Something Fishy

In the what'll-they-think-of-next category, an all-new embellishment for the proverbial throne.

It's unlikely to top the list of this year's hottest bath features, but here's one toilet that's guaranteed to be a conversation piece at parties—and perhaps a new form of water torture for the family cat. The Fish-n-Flush dual-reservoir commode features a 2.5 gallon functional tank, plus a separate 2.2 gallon acrylic aquarium tank that can be removed for easy cleaning without disrupting business. The aquarium tank accepts fresh or salt water, or can be left dry and used as a reptile terrarium.

Designed by AquaOne Technologies (www.aquaone.com) in partnership with a marine biologist, Fish-n-Flush comes complete with gravel, plastic plants, a dual filter system, LED lighting, a built-in feeder, fill valve, overflow tube, flapper, and suction pump. “We see the toilet serving as a great way to help [potty] train young children,” says AquaOne CEO Richard Quintana. Bonus: You won't have to travel far to bid farewell to the kids' pet goldfish when it meets its inevitable demise. - J. Sullivan

Going Out of Business

As risky lending products disappear, so do their agents.

Whether Federal Reserve Chairman Ben Bernanke is right that “the problems in the subprime [mortgage] market seem likely to be contained” from impacting the overall economy, is irrelevant to the thousands of lenders who joined unemployment lines in recent months, as banks and lending companies cut back in the face of pressure to rein in lending practices.

Among the more than two dozen sub-prime lenders who have shut their doors or significantly scaled back their operations in recent months is New Century Financial. In early April the Irvine, Calif.–based lender announced it was filing Chapter 11 bankruptcy protection and that it would lay off 3,200 workers (54 percent of its workforce) to better position the company for a sale.

New Century joins Wells Fargo & Co., which announced it cut 70 jobs in its sub-prime mortgage-servicing office in February. Others to make staff reductions are Fremont General Corp., based in Santa Monica, Calif., which announced significant numbers of layoffs of its 2,400 home-loan employees, and Orange, Calif.–based ACC Capital Holdings, parent company of Ameriquest Mortgage Co. Argent Mortgage Co. also announced a large reduction of its staff in its subprime businesses, according to the Los Angeles Times.

Executive heads are rolling as well. HSBC Holdings announced in late February that its head of North American business and CEO, Bobby Mehta, was stepping down and that Sandy Derickson, CEO of HSBC Bank USA and vice chairman of HSBC Finance, was also leaving. The departures came in the wake of an announcement from the company that it had to increase its reserves for bad loans to $10.56 billion, roughly 20 percent more than expected. HSBC took on many of the bad loans in 2003 when it paid more than $14 billion for Household International, then the country's largest subprime lender, according to published reports. - E. Butterfield