The highly publicized bankruptcy filing last week by First Alliance Corp. of Irvine, Calif., underscores the need for mainstream lenders to scrutinize their business structures as they enter the subprime mortgage business.

Consumer activists said they fear the entry by commercial banks and by the secondary marketing giants Fannie Mae and Freddie Mac will worsen problems - putting these companies in the line of fire of predatory-lending charges - rather than clean up the industry.

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