TOO MANY FAMILIES in this country have been celebrating the holiday season under a shadow of dread -the prospect of losing their homes.

The national mortgage meltdown, fueled by an explosion of risky subprime mortgages, is in full swing. In just the last six months, about 800,000 homeowners have entered foreclosure.

That's right: 800,000 people who have or are about to lose their homes, with millions more estimated over the next few years as adjustable-rate mortgages continue to reset to much higher, unaffordable levels.

That number is hard to comprehend.

Maybe that explains why President Bush, Congress and the Fed have yet to react with the proper degree of urgency. Maybe they are still trying to grasp what those numbers mean.

Although they have taken action recently to help some homeowners from losing their homes, that action will have about as much impact as washing the windows would keep a house from falling down.

Last month, Bush and Treasury Secretary Henry Paulson announced a plan that would help some subprime-mortgage borrowers by freezing for five years the low teaser interest rates on adjustable-rate mortgages. The Federal Reserve recently announced it will seek restrictions opn certain subprime-loan practices. And Congress has crafted a package of bills that would reform some banking practices.

These are more than empty gestures - they will help some homeowners -but they don't go nearly far enough in addressing the true size of the crisis or, more importantly, making sure the rotten seeds that led to it aren't sown again.

The crisis has its roots in Wall Street's fondness for fancy Ponzi schemes. The mortgage Ponzi scheme ran like this: sell tons of mortgage loans to risky borrowers, based on the belief that housing prices will rise forever, package them up, sell them to investors, and reap big profits.

Many factors conspired to create this crisis: exotic mortgages with hidden, undisclosed terms; lax loans for which proof of income was not even sought; low-ball appraisals that were setups for disaster. Many low-income people with shaky credit were lured into the promise of homeownership with loans they had no business getting, and could never hope to afford.

Then these loans started exploding like bombs, leaving homeowners with payments they couldn't afford.

And like dirty bombs, each foreclosure sends shrapnel through communities, neighborhoods and towns.

While these borrowers surely play a part in this crisis, they're the victims of a scheme that was allowed to flourish because of little oversight and regulation. Lenders were hardly up-front about the details of those loans, or fully informing people of what happened when the rates adjusted.

The programs and policies now being created will help only a fraction of those homewoners who need it. And, more critically, they are voluntary, so we are essentially relying on the industry that created the mess to fix it.

As lawmakers move toward stronger steps to fix this crisis, we hope that prosecution is added to regulatory and legislative fixes. Lenders who abused, deceived and misled borrowers into the mortgages of mass destruction should feel the full weight of the law. *