Toward the end of the 63-day escrow, their real estate agent learned that the loan documents had not yet arrived. It seemed that the buyer, a young, non-English-speaking Latina, didn't have a valid Social Security number, and so the lender would not qualify her.

The buyer's agent offered to put the buyer's boyfriend on the contract instead, but Newman rejected that idea when the agent admitted he couldn't guarantee that the boyfriend would have a valid Social Security number either.

At that point, the buyer's translator -- who Newman had assumed was a neutral party hired by the real estate agent -- offered to co-sign the contract.

Newman and her husband met with the buyer and her boyfriend -- a very young couple with two children -- and the translator, who then identified himself as a representative of the mortgage company.

After delaying the close of escrow several times (in turn delaying escrow on the new house the Newmans were buying in Walnut Creek, forcing them to pay extra to the seller to keep him happy and to pay a fee to their lender to keep the terms of their loan, a total cost of about $5,000), the sale finally went through, with the buyers paying an extra $1,000 for the delay.

But Newman continued to think about the peculiarity of the deal and her suspicion that the young buyers had somehow become a foil for a larger racket. How could this couple afford a $546,000 home? Why was the woman pre-approved without a Social Security number?

I too found Newman's experience mystifying. If it was a scam, it sure didn't seem like a very good way to make a buck. In fact, it seemed like a good way to lose a lot of bucks.

There have been cases of mortgage fraud in which brokerage houses lure undocumented immigrants into buying homes they cannot afford in order to close deals, thereby defrauding the lenders. But that wasn't the case here, since the mortgage company had been on the verge of pulling the loan.

I called Pro Capital Mortgage, the brokerage house that had handled the loan, and asked them. Why would an employee of their company be willing to co-sign for buyers with little money and no Social Security numbers -- probably an indicator of their undocumented status?

"Oh, they were part of his family," explained Nancy Keyghobadi, office manager and one of its owners. "He stepped in and saved the day. It was really nice of him."

Keyghobadi said that her company deals with a lot of low-income and immigrant Latino buyers and that such last-minute changes are not terribly unusual. When things go awry, there is often a co-signer who appears out of the woodwork to help the deal go through.

So Newman and her husband had not stumbled onto some underground mortgage cabal. But they had collided headlong with a growing sector of the housing market. The homeowner who would never have been a candidate for ownership in the past is now a major player in many starter-home markets.

In an era when home prices have soared, the loan market has been hard at work creating innovative products that allow increasing numbers of low-income individuals to mortgage their future to the hilt and buy their little slice of the American dream.

"I wouldn't say it's a big enough niche to constitute a trend," said Mary Mancera, of the National Association of Hispanic Real Estate Professionals, "but it is happening."

The Mortgage Guarantee Insurance Corp. recently completed a test program of 1,200 to 1,500 of these loans. After two years, Mancera said, there have only been two defaults.

She said Latinos in particular have an attitude that makes owning a home an especially high priority. "Homeownership has a personal meaning for Latinos. It's not perceived as an investment -- it's about hearth and home. So buyers tend to take a very long view."

And with immigrant populations growing, it's not surprising that many professionals in the real estate market have begun to calculate how this can translate into profits.

"Everyone in the housing industry is seeing the absolute potential for this in terms of the number of immigrants," said Mancera, explaining that they anticipate a change toward a more pragmatic immigration policy.

In a 2004 study, the National Association of Hispanic Real Estate Professionals estimated that if all undocumented renter households bought homes, they would add $44 billion in new mortgages to the U.S. housing market.

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