"People are desperate with their backs against the wall. They have no real options, and with mortgage payments going up hundreds of dollars a month, people are losing their homes. They are just desperate," said David Humphreys, attorney with Humphreys Wallace Humphreys of Tulsa.

Predatory lending and sub-prime loans are in the forefront of issues lately, due mainly to the fact that foreclosure rates nationwide are skyrocketing.

Humphreys sees this, having specialized in representing clients who were victimized by predatory lenders. However, only a handful of people seek lawyers for their dilemma, instead not realizing they not only have rights but the opportunity to fight back and keep their homes.

"A lot of people out there do not know their rights. They don't know what to do, so a lot of people do nothing," Humphreys said. "Either that, or they turn to foreclosure rescue scams which end up taking what's left of their equity and leaving folks on the streets. It's a bad situation."

The ugly problem

According to a report, "Stealing the American Dream: Predatory Lending in Oklahoma," the Nineties saw an explosion of sub-prime lending, which grew from a $35 million market in 1994 to a $220 million market in 2002.

Additionally, the report said, the problem of predatory lending has been calculated to cost borrowers an estimated $9.1 billion annually nationwide and $55.8 million annually in Oklahoma.

According to HUD/Treasury, Standard & Poor's and Freddie Mac, it was estimated that the number of sub-prime predatory loans issued in Oklahoma in 2000-2001 were astronomical. More than 20,000 sub-prime loans were issued in Oklahoma with prepayment penalties, 8,900 sub-prime loans were issued to borrowers who could have qualified for less expensive prime loans, and 2,500 sub-prime loans were issued with balloon terms.

The report also showed that race plays a key factor.

"Oklahoma's minority borrowers, especially African Americans, were more likely to receive sub-prime loans than whites. Over one-third (34 percent) of all loans issued to African Americans were sub-prime compared to 14 percent of all loans to Hispanics, 13 percent of all loans to American Indians and 10 percent of all loans to whites."

Lawsuits a plenty

In 2004, an Oklahoma borrower who claimed Ameriquest Mortgage Co. ruined her credit because it didn't pay off mortgages in refinance transactions won the largest individual verdict ever obtained against the massive sub-prime company.

Now, others are fighting back, as well.

"We only have a handful of clients nationwide who file fraud claims against these lenders," Humphreys said. "I've been involved in representing people who have been victimized by predatory lenders. These lenders are making loans that never should have been made, and they do it by falsifying records, financials and assessments. They secure the loans and then bundle them up and sell them to third parties."

In some cases, Humphreys said he saw the exact same credit card statements, same bank records and same 401(k) records for multiple loans.

"They were making up records in order to make the loans," Humphreys said.

Consumers have options, however. One option is to contact Consumer Counseling of Oklahoma, a United Way agency, which can help negotiate payments with mortgage companies.

"Or, if you feel you were lied to or fraud occurred, contact a lawyer," Humphreys said. "Before the courts foreclose on homes, they want to make sure the lenders' hands are clean. You can stop a foreclosure if there is fraud."

With more than 7,000 foreclosures filed in Oklahoma since the beginning of the year, only a few consumers have filed, Humphreys said.

Is it as bad as it appears?

Sub-prime loans make up about one-seventh of all outstanding mortgages.

Of that number, about one-eighth - that's one-eighth of one-seventh of all outstanding mortgages - are behind in their payments. About half of those will end up getting foreclosed - one-half of one-eighth of one-seventh of all outstanding mortgages.

"In the greater scheme of things, that's not many," states Roger M. Beverage, president and CEO of the Oklahoma Bankers Association.