The Federal Trade Commission has filed a seven-count complaint against a subprime mortgage lender the consumer watch-dog agency says misled home owners with poor credit histories into taking loans packed with abnormally high fees and rates.

The lender, First Alliance Mortgage Co. of Irvine, Calif., and two of its affiliates, has filed for bankruptcy and is in receivership. But the FTC is going after the company anyway in an effort to get redress for consumers, including recession of the bad loans.

Meanwhile, a U.S. District Court Judge has cleared the way for the trial of a small Washington, D.C., mortgage firm charged with making predatory loans to minorities. And one of the nation's largest subprime lenders, Delta Funding Corp. of Woodbury, N.Y., has taken itself out of the high-cost loan business because it says they are often mistaken for predatory mortgages.

According to the FTC's allegations, loan officers with the First Alliance companies used a lengthy, 13-step sales presentation known as "The Track" to sell unsuspecting consumers who were poor risks and had little chance of paying back what they borrowed.

The owners were duped into believing they were borrowing less money at lower rates than they actually were, the FTC has charged. But they were misled by loan reps about the extent of origination fees that sometimes ran to 25 percent of the loan amount and about the rate and payments of the adjustable rate mortgages the company was peddling.

The loans included short-term, front-end "teaser" interest rates that apply only for the first six months of the loan. But borrowers were told the initial rate would remain constant unless market interest rates increase, according to the FTC. In fact, the rate increased as much as one percentage point every six months, regardless of market conditions.

"Lying about loan terms is bad, period," said Jodie Bernstein, director of the FTC's Bureau of Consumer Protection. "But systematically lying to homeowners whom you know to have poor credit histories is just unconscionable."

In the D.C. case, meanwhile, Judge Joyce Hens Green disagreed with Capital City Mortgage, which argued that permitting a case to go forward based on predatory lending, which it called a legal term of "little value," will discourage lenders from making loans to minorities.

"Non-predatory lenders will be able to show that their lending practices are legitimate, and so avoid liability," the Judge Green said in a ruling that clears the case for trial. "Whether the practices alleged occurred, and whether they were unfair and predatory, is a question for the jury."

Finally, Delta Funding, which was the subject of front-page news stories in the New York area, has announced it will no longer make loans that come under the Home Ownership and Equity Protection Act, a law that covers high-cost mortgages.

Though the company claims only a small part of its $4 billion loan portfolio are HOEPA loans, President Hugh Miller said they have become "a lightening rod for criticism and attack" because of their high costs.

Consumer advocacy groups have targeted the company for abusive loan practices and making a disproportionate number of loans in lower-income and minority neighborhoods on Long Island.