PHILADELPHIA (Reuters) - Authorities in Philadelphia will suspend foreclosure sales of homes whose owners have fallen behind on adjustable-rate subprime loan payments -- potential relief for tens of thousands of struggling debtors.

Sheriff John Green said on Friday he would halt sales of foreclosed properties in April and would seek a court order extending a moratorium for an unspecified period.

His action follows a nonbinding resolution passed unanimously by the Philadelphia City Council on Thursday calling on Green to stop the sales to give borrowers more time to seek a settlement that would prevent them from losing their homes.

Philadelphia becomes the first U.S. city to halt foreclosure sales in the current crisis, although Cleveland and Baltimore are considering similar measures, said ACORN, an advocacy group for low-income families.

The group said 45,470 subprime foreclosures are expected in Pennsylvania between the third quarter of 2007 and the end of 2009.

Green, the sheriff of Philadelphia city and county, is trying to identify and track homeowners with weak credit histories who took out the loans with initially low repayments but who are no longer able to afford them because their rates have adjusted sharply higher.

Such loans are expected to lead to a flood of foreclosures throughout the United States this year, and have led to severe losses among financial firms trading in securities backed by the mortgages. ACORN estimates 2.2 million mortgage loans will go into foreclosure in 2008 due to the subprime crisis.

“Given the severity and complexity of mortgage foreclosures, a moratorium will allow for more time to identify and help distressed home owners,” Green said in a statement.

The resolution said 3,206 “high-cost” mortgage loans made in 2006 are likely to enter foreclosure in Philadelphia, representing losses totaling $345 million to homeowners, lenders, and local government, as well as falling home values.

Lenders would take about $158 million in losses; homeowners $23 million; and local government $62 million if the foreclosures go ahead, the council’s resolution said.

A spokesman for ACORN called on lenders to work with Philadelphia on the policy to help find a solution and avoid a lengthy moratorium.

Home prices in the Philadelphia region appreciated at a 2.04 percent rate in the fourth quarter of 2007, down from 6.74 percent at the end of 2006 and 14.3 percent in 2005, according to quarterly reports from the Office of Federal Housing Enterprise Oversight.

Across the nation, home prices fell 3 percent in January from a year earlier, the federal agency said.

In defense of its action, the council also said foreclosures increase violent crime in affected neighborhoods, hurt property values and reduce city tax revenue.

Yajaira Rivera, a mother of four, said she took out a $106,000 mortgage on her Philadelphia home with GMAC in February 2005 and expected to pay $920 a month. Instead, she was presented with an initial payment demand of $1,235, which increased to $1,671 before she negotiated a lower payment.

She still cannot make the payments, so her home is scheduled to be sold by the sheriff on May 6, meaning the April moratorium will not cover her unless it is extended.

“The reality is that it has only bought us a window of 30 days,” she said.

Local and national branches of the Mortgage Bankers Association did not immediately return phone calls seeking comment on the Philadelphia plan.