The international attention on America’s subprime mortgage crisis has not translated into help for homeowners, advocates and experts say. Across the country, distressed borrowers are still losing their homes.

To address the immediate crisis, they say, the Obama administration must impose a moratorium on foreclosures, and then enact a plan to modify existing mortgages and make them affordable for struggling borrowers. But to avoid future crises, they say, the administration must move to prevent the predatory mortgage lending that created the foreclosures in the first place.

By the end of 2008, some 2.2 million houses will have fallen into foreclosure nationwide, according to the Mortgage Bankers Association. And that number is expected to keep growing. A recent report from Credit Suisse estimates that 8 million Americans will lose their homes in the next four years –—1 in 7 homeowners.

The Hope for Homeowners program, created in July through the Housing and Economic Recovery Act of 2008, was supposed to slow the foreclosures. Administered by the Department of Housing and Urban Development, the program helps struggling borrowers refinance their mortgages into lower-rate loans insured by the Federal Housing Administration. When Hope for Homeowners was first announced, HUD officials claimed it would save 400,000 homes from foreclosure. Almost two months after its Oct. 1 launch date, program officials said they had received fewer than 200 applications from borrowers.

HUD changed the terms of the program slightly in late November, hoping to entice more borrowers to seek relief from Hope for Homeowners. Borrowers aren’t the only group hesitant about Hope for Homeowners; many lenders have declined to join the voluntary program. At a House hearing in September, legislators had discussed making lender participation mandatory, but decided to hold off on requiring banks to sign on.

John Taylor, executive director of the National Community Reinvestment Coalition, a non-profit fair lending advocacy group, said Congress shouldn’t bother changing the program.

“I think they should set that legislation on fire, scrap it, throw it out the window and start from scratch,” said Taylor, who said the program was a poorly-designed and rushed response created in a mode of “crisis management government.”

The Hope for Homeowners Program was not intended to be the sole lifeline for struggling borrowers. As it was originally designed, the Treasury Department’s Troubled Asset Relief Program, known as the TARP, would have purchased troubled assets, including mortgage-backed securities, from banks and investment firms. The department would then have had leeway to renegotiate or modify the mortgages in those securities. But the department revised its initial plan, and has shored up banks through direct investment, leaving homeowners wondering where they fit in to the massive bank bailout.

The bipartisan Congressional Oversight Panel, which monitors the TARP, has faulted the Treasury department for focusing too much on investors and not enough on homeowners and families. The panel's first report pushed the department to clarify its plans for foreclosure mitigation. It also asked for details on why the Treasury department had not supported a homeowner rescue plan backed by FDIC Chair Sheila Bair.

Taylor said quick action on foreclosures is not merely a matter of helping homeowners.

“I think at this point everybody understands that if you do not stop the level of foreclosures this economy is going to continue to worsen,” he said.

The President-elect has made public statements to the same effect.

“The deteriorating assets in the financial markets are rooted in the deterioration of people being able to pay their mortgages and stay in their homes,” Barack Obama said at a Dec. 3 news conference in Chicago. “And if we help Main Street, ultimately we're going to help Wall Street.”

Taylor said the new administration should put a moratorium on foreclosures while it crafts a program to modify loans in what he called “a meaningful way.” That would mean not just postponing or extending loan payments, but reducing the principal and interest on the mortgage and ensuring that monthly payments match the borrower’s ability to repay, he said.

But those moves only address the immediate problem, Taylor said. To avert future crises, the new administration must prohibit the lending practices that caused the financial meltdown, he said.

So far, that has not happened.“There’s not one bill passed that will make a difference on mortgages going forward,” said Margot Saunders, an attorney with the National Consumer Law Center. Many of the practices considered predatory, including high up-front fees, pre-payment penalties, and mandatory arbitration clauses, have been and still are legal under federal law, Saunders said.

The Congressional Oversight Panel may play a part in changing that.

The panel’s recent report asked whether the Treasury department has required banks receiving aid to “replace failed executives and/or directors” or “undertake internal reforms to prevent future crises.” Elizabeth Warren, the Harvard University law professor chairing the oversight panel, has suggested that aid to banks should be linked to reform of questionable lending practices.

Those poor lending practices are in large part to blame for current financial crisis, said Okianer Christian Dark, a professor at the Howard University School of Law. Low-income communities and communities of color have historically been under-served by mainstream banks, creating a vacuum that allowed abusive lenders to step in, she said.

“For years – for years – civil rights organizations have been warning about predatory lending and subprime market mortgages that target communities of color, communities that often do not have access to traditional lending institutions,” Dark said.

Dark sat on a bipartisan commission on fair housing, chaired by former HUD Secretaries Henry Cisneros and Jack Kemp. The commission is recommending that the Obama administration form a new Cabinet-level agency to promote and protect fair housing, including equitable access to affordable, prime-rate loans for communities of color.

The formation of an independent Office of Fair Housing “is the only way we can see to begin to address the serious problems of housing discrimination and segregation that have now helped to lead us to our current financial crisis, due in part to poor enforcement of our fair housing and civil rights laws,” Cisneros said at a news conference announcing the commission’s findings.

He said that the commission expects the new administration to be receptive to the proposal, while acknowledging that the financial crisis makes the creation of a new and potentially costly agency a challenge.

“It isn't a pipe dream. It can be done,” Cisneros said. “We simply have to do better as a country.”