NEW YORK - As Canada took pre-emptive steps this week to thwart a possible housing bubble, the United States has done little to reform the reckless lending practices that, two years ago, led to the near-collapse of the country's financial system.

For now, the industry is cleaning up its own bad behaviour. U.S. lenders have put a stop to zero-money-down mortgages and so-called liar loans, the "no-doc" or "low-doc" mortgages that don't require income documentation. But there has been little in the way of new regulation that would prevent the return of such practices.

Meanwhile, the ability of Americans to get a tax deduction for their annual mortgage interest payments -- which essentially encourages them not to pay down their mortgages -- remains sacrosanct. Sweeping reforms, including a simple provision that would require lenders to ensure a borrower's ability to repay, were proposed by U.S. lawmakers in 2007, but they remain hung up by debate.

"There's been a fair amount of tightening, but it's coming out of the private sector," said Greg Rand, managing partner at Better Homes and Gardens Rand Realty, a brokerage in the suburbs north of New York. "It sounds simplistic, but lenders want to make sure they get their money back."

Vince Malta, liaison to government affairs with the National Association of Realtors, said he's worried the pendulum might swing too far and U.S. lawmakers will crack down on the industry too hard.

"I would hate to see someone who qualifies to purchase a home, but is unable to because of some regulatory scheme that goes overboard," he said.

Meantime, not only are the exotic loans that got the United States into the housing crisis gone, but standard mortgage loans also are hard to come by for many prospective buyers around the country.

"Even regular, good people cannot get a loan," said Andrew Mungar, a real estate broker in Texas and author of the new book The Homeowner Survival Guide. "I have a lot of clients that make good income but are still having trouble getting a loan because conditions are so tight."

With 10,000 new U.S. foreclosures still hitting the market each day, the caution might be understandable, Mr. Mungar said. "We still have billions of dollars of adjustable-rate mortgages and interest-rate only mortgages to hit the market."

One of the main reasons why Canada's housing market held up while America's cratered is that U.S. lending standards all but disappeared.

Canada also wasn't as swept up by the securitization market, in which bankers bundled mortgages and sold them off to investors.

Barry Ritholtz, a well-known blogger and investor, pointed out other important factors at play in a recent post on his "Big Picture" blog.

While Americans are walking away from their underwater mortgages in droves, Canada has full recourse mortgages, which means a homeowner can walk away from the house, but not the duty to pay the mortgage debt, Mr. Ritholtz said.