We have been examining the subprime mortgage crisis in the United States that has caused thousands of Americans to lose their homes, and has resulted in losses to financial markets around the world.  In this third and final part to our series on the crisis, VOA's Jeff Swicord takes a look at a community organization that is working to move homeowners out of subprime mortgages into more stable fixed rate loans.

Project Director James Jones oversees seminar to help borrowers on verge of default or foreclosure to refinance

New clients attend a gathering at the East Side Organizing Project, or ESOP, in Cleveland Ohio.  ESOP is a non-profit community organization that works to refinance subprime mortgage borrowers on the verge of default or foreclosure.  Project Director James Jones oversees three orientation sessions a week. He recollects attendance at previous orientation sessions.

 "Back in August we were having 20 to 25 people in a session.  And that went on for about a month and a half.  It seemed like it cooled down a bit.  In October it exploded again," he said.

Jones says subprime, or higher interest rate, loans first appeared in Cleveland's inner city neighborhoods. They are aimed at lower income borrowers who do not qualify for lower interest loans.  Low adjustable rate mortgages, or ARMs, benefit first time buyers because of the loans' introductory rates.  But those rates usually increase in two to five years.

"Some of those folks may have fallen victim.  When they sat down to read the contract, they saw that it had a variable rate and they may have asked the broker, 'What does that mean?'" Jones said.

He explains, by the time the mortgages ballooned, the broker had closed up shop and left the area. And the borrower was left with a mortgage that he or she could no longer afford. 

Mark Trawicki says he fell victim to a fast talking broker. 

 "Well, he looked over my original loan, and he said, 'I can reduce your monthly payment by about a hundred bucks.'  And I said, 'OK, that sounds like a good deal,' and it would be an adjustable rate for five years," he explained.

His mortgage ballooned from 3.7 percent to 8.25 percent, and he says he is having trouble paying his bills.

"So, at this point I am trying to stop the hemorrhaging and get back to something I can work with," he said.

ESOP counselor Kristin Anderson says Trawicki's financial situation is better than most clients.  She will try to get his lender to renegotiate his mortgage to a more affordable fixed rate.

"He is showing a surplus in his income," she noted.  "So, they might say that he can afford this.  So usually, I go back and fight with the lender and say if you don't put him into a fixed rate, eventually he is not going to be able to pay his mortgage."

East Side Organizing Project officers say they do not expect foreclosures in the Cleveland area to slow down anytime soon.  They say more homeowners will be walking through their door looking for help well beyond 2010.