Housing group asks for two-year moratorium on adjustable rate mortgage resets

CLEVELAND -- If "Beverly Hills, 90210" is the zip code of affluence and glamour, then "Cleveland, 44105" has become the nation's ground zero for mortgage foreclosures.

The east side neighborhood that includes Slavic Village and Union-Miles has the highest rate of home foreclosures in the United States.

In that neighborhood a national policy group Wednesday launched "Save the American Dream", an effort to head off wholesale foreclosures by a two-year moratorium on re-sets of adjustable rate mortgages.

A record number of ARM's -- 600,000 -- are due for re-set in October.

"People who are currently paying $800 a month will owe up to $1,200 or $1,400 mortgage payments," said George Goehl, executive director of the National Training and Information Center based in Chicago.

"This is going to create homelessness," said Inez Killingsworth of Empowering and Strengthening Ohio's People.

A coalition of national and housing groups called for the mortgage industry to agree to the two year moratorium on rate adjustments voluntarily.

"There are a lot of solutions on the table that are going to ask taxpayers to bail out lenders and figure out how to keep people in their homes. It's in the lenders' self-interest to bail themselves out," Goehl said.

Housing representatives from Cincinnati, Pittsburgh, Cleveland, Des Moines and Wichita were in Cleveland for launch of the campaign. They toured the neighborhoods hardest-hit by recent foreclosures.

Indication of the worldwide significance of the local problem -- news crews from China, Japan, France and Australia have visited Cleveland in recent days to report on foreclosures here.

Their concern was on the worldwide impact on their financial markets.