Maybe Watsonville private investigator Emilio Martinez has a crystal ball. Seven months ago, he predicted a foreclosure epidemic would sweep Santa Cruz County.

Since then, foreclosure sales in the tri-county area -- Santa Cruz, Monterey and San Benito counties -- have spiked to 786, a tenfold increase compared to a year ago. According to the Santa Cruz Record, the tally in Santa Cruz County is 147. In Monterey, it's 514. San Benito, 125.

Martinez said a steady stream of people have come to his spartan office in a shopping center on East Lake Avenue unable to make their mortgage payments and asking, in Spanish, for his help.

"Few want to talk about it for one simple reason; it is Latinos taking advantage of Latinos," he said.

Soquel attorney William Purdy concurred.

"Hispanics in particular, but by no means exclusively, are having their life dreams stolen from them at an appalling rate," he said. "It is being done primarily in my experience by other Hispanics."

It's not just Santa Cruz County. A study of mortgage lending in 172 communities, undertaken by ACORN, a housing advocacy organization, found Latinos are much more likely than whites to pay more for a home loan or to refinance a mortgage.

Martinez and Purdy blame predatory lending practices targeting Latinos whose command of English is minimal at best.

The story is often the same: The borrower is a landscaper and his household income is about $40,000 a year, but on the loan documents, he is listed as the owner of a landscaping firm making more than $100,000 a year. Now the borrower and his family are in danger of losing a $700,000 home they can't afford.

Martinez added, "I have a client in Salinas, a broker lent him $40,000 to make payments and now he wants the $40,000 back. Creative financing is not a mortgage broker lending someone money to make payments."

He finds it incredible that Alan Greenspan, who chaired the Federal Reserve for 18 years until his retirement in January 2006, did not realize what might happen.

"Our industry's image is tainted by the actions of a few bad actors," Felix DeHerrera, chairman of the National Association of Hispanic Real Estate Professionals, said Monday.

His statement accompanied the release of a code of ethics for its 15,000 members, which include mortgage originators, real estate agents and escrow officers. The 11-page code requires members to:

• Recommend homes to buyers only if the buyer is able to repay.

• Educate borrowers about the harmful effects of negative amortization loans.

• Conduct reviews to ensure qualifying consumers are offered a prime loan.

• Disclose financial relationships with any third party where the customer is paying the fee.

"A perfect storm of shrinking values and the current credit crunch threatens to undermine the steady homeownership gains our community has made in the past 20 years," said association President and CEO Tim Sandos. "For those borrowers who have fallen prey to unethical practitioners, the American Dream has become a nightmare."

Martinez, the private investigator, said the code comes too late for Latinos evicted from homes they can't afford, lowering their credit scores, making it hard for them to buy a car or rent a house.

Purdy, the attorney, welcomes the code but calls it "too little too late for all the Hispanics systematically targeted and financially devastated by the loans already in place."

He urged officials in Sacramento to act, saying, "Codes of ethics and membership organizations are useless without vigorous enforcement widely publicized."

In four years, the number of brokers and salespeople licensed by the state Department of Real Estate has grown from 356,000 to 537,000. Staffing has grown from 310 to 342; about half work on enforcement, according to spokesman Tom Pool.

The number of complaints has grown from 7,800 to 11,200, investigations from 6,990 to 9,100. The result four years ago: 659 licenses denied, 251 licenses revoked, 72 licenses suspended. Last year: 1,382 licenses denied; 394 licenses revoked and 113 licenses suspended.