Beth and Stuart Gorowitz spent five years shopping for an ideal place to settle down and raise a family. In 1980, they came upon Timberlawn, a budding neighborhood south of Rockville, and put their life savings into a house there.

What sold them, they said, was the promise of the developer, U.S. Home, to complete a community of large houses on quiet, twisty cul-de-sacs that would be limited to 278 families.

"When we saw this beautiful model home and the subdivision layout," said Stuart Gorowitz, "we were looking at the American dream."

More than 30 other families bought houses there between April 1980 and last March, each making a commitment of more than $200,000, each sold on the same promise.

In the last several months, however, their dream has vanished. U.S. Home has asked for a re-zoning that would transform the planned community from 278 to more than 900 families, and requested to build blocks of townhouses and single-family houses smaller than those originally planned, as well as bring a through-road through the community.

Robert Hillerson, an attorney hired by the home owners, says he negotiated a compromise zoning plan, but he said plans that U.S. Home submitted to the Maryland National Park and Planning Commission did not match the arrangement he thought they had agreed on. As the Dec. 9 re-zoning hearing approaches, Hillerson said he has been unable to get U.S. Home to talk further about the plans.

Robert L. Sithens, president of U.S. Home's Maryland Division, said his firm has "made serious and substantial concessions to the owners' requests for redesign of the site."

Responding by letter to a reporter's questions, he said that after five months of negotiations "it eventually became obvious to us that any plan, no matter how structured would not receive the final approval of the current residents of Timberlawn. Therefore, we have recently submitted a plan to the Montgomery County Planning Board that we feel certain incorporates all the major requests of the Timberlawn community."

He also said wrote that when Timberlawn was designed and the large houses sold there were no plans to increase the neighborhood's density, but changes in the housing market altered that.

"Our decision to build more affordable, detached and attached single-family homes was motivated by this changing market--the economic realities coupled with the severe shortage of 'middle-class' homes, those catering to young professionals and upper age levels," he wrote.

"At the time the current residents of Timberlawn puchased their homes, we had every intention of completing the Timberlawn project as it was begun," Sithens wrote. "We did not mislead these homeowners; rather, we accurately assessed them of our future plans, at that time, for development."

Montgomery County Consumer Affairs Director Barbara Gregg said that as a result of homeowner complaints her office has opened an investigation concerning the promises U.S. Home made about plans for the nieghborhood, which is between Rockville Pike and Old Georgetown Road, north of Tuckerman Lane and south of Edson Lane.

In the meantime, construction of the large, expensive homes has stopped, and owners watched helplessly as several of their neighbors have tried unsuccessfully to sell their houses for less than the original purchase prices of from $203,000 to $250,000. Some homeowners who have sought to sell at a loss believe buyers are discouraged by vacant, weed filled, ungraded lots among the houses, by the unfinished roads, or by the re-zoning application that threatens to put townhouses close to the existing houses.

"I found I couldn't even get people to go back there," said Dee Murphy, a real estate agent with Town and Country Realtors. "I've had difficulty even getting people to look" at houses in Timberlawn.

While she sells other, equally expensive houses in nearby areas, Murphy said, prospective buyers generally "don't want to put that kind of money into a place as unsettled as Timberlawn."

"Those people are just sitting there in these very expensive homes and losing their shirts."

Disillusioned as efforts to sell have failed and discouraged that the neighborhood will never turn out to be what they envisioned, many owners said they feel cornered.

"When you put your life's savings into a house, that's where you want to spend the rest of your life," said Gorowitz. "That's the disgusting thing: Now, even if we wanted to get out, we can't. We're strapped, we're stuck."

The Timberlawn Homeowners Civic Association says it is prepared to accept most of the changes that U.S. Home wants: adding townhouses and increasing the density of the neighborhood. What their attorney, Hillerson, has been trying to compromise on is layout of the remaining, undeveloped part of the Timberlawn project. The current home owners want the townhouses, smaller single-family houses and villas arranged so that there will be as little clash as possible the large homes and the townhouses.

Hillerson said attorneys for U.S. Home agreed to a plan that would ring the current houses with smaller single-family structures, and gradually increase the density as the project went farther south and away from the large homes off Edson Lane.

The plan U.S. Home submitted to the planning commission shows most of the basic arrangement of the compromise, Hillerson said, but brings townhouses approximately 175 feet closer in one area than what the home owners were willing to accept. He said unless that is corrected, he will oppose U.S. Home's entire zoning package. That request asks county officials to increase the density from three units per acre to 44.

Sithens noted in his letter that U.S. Home has agreed to re-route the through road and to build single-family houses adjacent to the ones already there.

Hillerson said the homeowners had accepted the plan he negotiated.

He noted that the county planners originally slated that area for a high density. With the outlook for housing geared toward less-expensive houses, he said, the county Planning Board favors higher density, especially for the area around Timberlawn, which is near White Flint shopping mall and the White Flint subway station.

The county consumer affairs office had temporarily placed the Timberlawn case on hold while Hillerson attempted to negotiate a compromise with Jerome E. Korpeck, an attorney U.S. Home hired to handle the Timberlawn development, according to director Gregg.

She said last week that if the negotiations between the two attorneys failed to produce a compromise, the investigation into whether U.S. Home made false representations to the buyers would resume.

Gregg added that if the buyers and U.S. Home reach agreement, the investigation might also continue.

Hillerson said he was unable to get an answer from Korpeck why the final design differed from the one he said they had agreed on.

In a brief interview with a reporter, Korpeck would not say whether U.S. Home's submission was intended to differ from Hillerson's version.

Korpeck predicted that U.S. Home would be able to obtain the denser zoning because the county master plan originally called for townhouses in that area.

"All this is going through planners who don't care whose ox is gored," Korpeck said. "All they want is a good plan."

In a meeting this week the homeowners association voted to ask the planning commission to delay the Dec. 9 hearing on the grounds that they have not had enough time to review the plan, and because they weren't certain whether the builder intended to incorporate the changes that they were asking for.

Gregory R. Hoy stood up at the meeting, and told 31 neighbors gathered in the basement of a house on Magic Mountain Drive that when he bought his house in last March, he was assured the development would be made up of 278 large houses on third-acre tracts. Three months later, U.S. Home submitted plans to planning officials depicting a community of more than 1,000 homes.

"They only had this upper half on the table," Hoy said, pointing to a map of the subdivision. "That's all we saw."

As the meeting ended, others who had bought homes there -- lawyers, doctors, prominent government officials -- recalled problems they never thought would be part of their dream community.

Humberto and Juana Causilla bought the first house at Timberlawn in April, 1980.

"We were so happy," Juana Causilla said. "We thought this was ideal. Now my heart is bleeding because I cannot believe they could do this to us."

"We used to live in Potomac, and we moved here to have a sense of community," said Shakti Kapur."What do I do now? I lost money, and I lost the community."