American lawmakers and law enforcers are busy with the housing finance market.

Many of the recent problems were caused by subprime mortgages. These highly profitable loans were marketed to risky buyers and then sold to investors. But even homeowners with good credit are having trouble with other new kinds of loans.

A Senate bill could help some people get lower-cost loans. It would let the government guarantee three hundred billion dollars in new financing.

The first big sign of problems with mortgage investments, which led to a worldwide credit crisis, came last summer. Two funds of the Bear Stearns investment bank collapsed. They were heavily invested in risky home loans. Investors lost almost one and a half billion dollars.

Federal agents with Matthew Tannin, a former Bear Stearns hedge fund manager, after his arrest last week in New York

Last week, the Justice Department announced charges against the two men who led the hedge funds, Ralph Cioffi and Matthew Tannin. Officials say that by March of last year, the managers believed the funds were at risk of collapse, but lied to keep investors from leaving. Both men have pleaded not guilty.

Separately, the Justice Department and the Federal Bureau of Investigation announced the results of Operation Malicious Mortgage. That investigation led to more than four hundred arrests in the last three months.

The people were charged with mortgage-related misrepresentations and other criminal abuses. The F.B.I. estimates that these mortgage fraud cases resulted in about one billion dollars in losses.

Officials said nineteen companies were being investigated in connection with subprime loans. They included mortgage lenders, investment banks, hedge funds, accounting companies and credit rating agencies.

This week, the Securities and Exchange Commission proposed new rules for credit rating agencies. The aim is to reduce the dependence of money managers and investment banks on credit ratings as a measure of risk.

Critics say credit rating agencies seriously underestimated the risk of many mortgage-related securities.

And, shareholders in the nation's largest mortgage company, Countrywide, agreed Wednesday to sell the company to Bank of America. Countrywide has lost billions on bad loans, and its lending activities are the target of lawsuits. Also, there are accusations that some lawmakers in Congress got special treatment on loans through its chief, Angelo Mozilo.

And that's the VOA Special English Economics Report, written by Mario Ritter and online at voaspecialenglish.com. I'm Jim Tedder.