Congress and the president need to do more to regulate the home lending industry.

The bill President Bush signed into law does not go nearly far enough.

And it does not recognize that the home lending crisis is having a disproportionate impact on black and Latino families.

More than 50 percent of blacks and 40 percent of Latinos who got mortgages in 2006 were steered into subprime instruments, according to the Center for Responsible Lending.

By 2007, as the adjustable interest rates on subprime mortgages soared, hundreds of thousands of families lost their homes.

Neighborhoods targeted by mortgage brokers and lenders have been devastated, as home values and family net worth plummet due to a high concentration of foreclosures.

In seven of the 10 metro areas with the highest foreclosure rates in June, Latinos are at least one-third of the population, according to RealtyTrac. In two of them — Merced, Calif., and Salinas-Monterey, Calif. — more than half the population is Latino.

In Detroit and Miami — the cities with the 13th and 15th highest foreclosure rates — blacks account for nearly a quarter of the population.

Because of the subprime meltdown, homeownership gains for people of color have been set back nearly half a decade, with more than $213 billion in lost home equity. The consequences of this asset depletion are clear.

High foreclosure rates have decimated tax bases in the worst-hit localities, which could mean cut backs in essential spending — on social programs such as health care, child care and schools, as well as on infrastructure like bridges and roads.

Beyond the data, the ruins of the foreclosure boom are visible around the country.

In Cleveland, streets in some formerly vibrant neighborhoods are filled with boarded-up windows. Foreclosure and sheriff-sale signs abound. Vandals and vagrants have replaced playing children.

An increase in the foreclosure rate to about 2.8 foreclosures for every 100 owner-occupied properties in one year corresponds to an increase in neighborhood violent crime of approximately 6.7 percent, says a study conducted by the Woodstock Institute, a policy center that promotes community reinvestment and economic development.

The bill that Bush signed will bring relief to only a small percentage of people who face foreclosure. And it won’t do enough to restrict the predatory practices of the lending industry.

According to "Beyond the Meltdown," a recent Demos (the organization I work for) report that analyzes the history of home lending and new law, the federal government needs to create broad, no-nonsense rules for the lending industry.

Rather than simply mandate thou-shalt-nots in an effort to clean up the industry, policies should aim at promoting straightforward and responsible business practices that ensure a fair and reasonable relationship between lenders and borrowers. This regulatory system should cover everyone from mortgage brokers to lenders to mortgage securitizers. In addition, a watchdog agency with a clear commitment to the public interest should provide oversight.

Civil rights laws such as the Fair Housing Act need to be updated to reflect modern homeownership. The federal government should ensure access to mortgage products with fair terms for communities of color. It should also impose penalties on lenders who violate lending regulations.

For many American families, especially blacks and Latino families, the current housing crisis shows no sign of abating.

Despite the new law, we still need to address this crisis. And now we have to rebuild our communities from the bottom up: with jobs, education and, yes, affordable housing.

If the federal government does not assist our communities any further, the crumbling will continue.

Jose A. Garcia is a senior research and policy associate at Demos (demos.org), a national public policy center. He is the author of many reports on debt and race, and is the co-author of the new book “Up to Our Eyeballs: How Shady Lenders and Failed Economic Policies are Drowning Americans In Debt” (The New Press/Demos, April 2008) uptooureyeballs.com. He can be reached at pmproj@progressive.org.