Acting on newspaper reports of potentially fraudulent lending practices, the Federal Bureau of Investigation and other authorities have opened an inquiry into Beazer Homes, on of the nation's biggest homebuilders.

The Department of Housing and Urban Development, which is also part of the investigation, said the investigation is focusing on whether Beazer complied with rules governing federally insured mortgages when it arranged financing for people buying its homes.

The Charlotte Observer recently published articles that described questionable loans Beazer arranged for its buyers and an unusually high foreclosure rate in a Beazer housing development in North Carolina.

The Wall Street Journal noted that the probe comes as regulators have begun to review mortgage lenders' practices as defaults have increased as housing prices have plateaued. Many big hombuilders arrange loans for their buyers. Some have attracted the attention of federal authorities because of a rising number of foreclosures of questionable underwriting practices.

Ken Lucas, an F.B.I. spokesman in Charlotte, N.C, said in an interview with the Journal that "there are potentially all sorts of fraud issues associated with Beazer to include corporate, mortgage or investments in varying degrees."

Beazer said the U.S. Attorney has requested documents related to its mortgage business, but added officials have not accused it of doing anything wrong. In a statement, Beazer said its own internal investigation did not find "any evidence to support the allegations" made by the Charlotte Observer. It also said it would "fully cooperate" with authorities.

Separately, the Securities and Exchange Commission told Congress it had set up a special unit to probe possible fraud involving subprime mortgage lenders, the Financial Times reported.

Congressional investigators said more than 2 million Americans could face foreclosure in the next two years. Looser lending standards and deceptive sales practices by mortgage brokers are often to blame, they said. More than two dozen brokers have shut down or gone bankrupt in recent months after a sudden increase in defaults, the FT said.