THE GOOD NEWS is that New Century Financial, the subprime-mortgage company, declared bankruptcy this week after a huge number of homeowners found themselves unable to keep up with the mortgages the company granted. That's because many of the borrowers, despite low incomes or shaky credit, got mortgages they couldn't afford.

The bad news is that we won't be surprised if Congress tries to bail out New Century.

Cynical? Not given the lack of real interest to date from either Congress or the state in addressing the devastating effects of subprime and predatory loans.

A new report released yesterday by the Philadelphia Reinvestment Fund paints the clearest picture so far of that devastation.

The "Lost Values" report studied and analyzed the mortgage and loan histories of 15,500 Philadelphia properties made from 2000-2003. The report estimates that one in every 30 Philadelphia homeowners has been touched by predatory lending. And for those who refinanced their mortgages more than once, the chances that they are a victim increases to one in seven.

Predatory lenders target poor and moderate-income people; in most cases, the home was the person's only asset.

The predators make complex, high-priced loans that come with outrageous fees. Sometimes borrowers have to take out a second predatory loan to pay for the fees on the first one.

Then the problems begin: People can't afford the loans. Often, the loans outstrip the amount of equity in the home. In fact, about 18 percent of the homes in the study had loans exceeding five times the property's assessed value.

The next step down is foreclosure. The city routinely sees 5,000-6,000 a year, and the Reinvestment Fund estimates that these foreclosed properties are twice as likely to show signs of being the result of predatory loans.

This erosion of values and the loss of so many homes is a crisis for this city.

Recognizing this, City Councilwoman Marian Tasco attempted tough city legislation in 2001; unfortunately, the state quickly pre-empted the city's laws, and enacted a much weaker set of regulations.

The New Century collapse and its widespread impact on the market has focused new attention to this problem. Last week, the head of the Federal Deposit Insurance Corp. called on Congress to enact national anti-predatory-lending standards.

At the state level, the state Banking secretary has a set of bills that would help tighten and regulate the kinds of companies that can offer loans.

The Reinvestment Fund report urges tighter suitability standards for lenders granting mortgages, and stricter enforcement of existing laws.

That's why we were glad to hear that at least one official is taking this problem seriously. U.S. Attorney Pat Meehan created a task force in 2001 to target predatory lenders. The idea of these predators in handcuffs is one of the few bright spots in this heartbreaking landscape. *