NEW YORK — In 2003, Anita Britten refinanced her two-story brick cottage in Lithonia, Ga., using a hybrid adjustable-rate mortgage. Her lender assured her that she could change the riskier loan into a traditional one when her interest rate started to reset.

Three years later, Britten can't get a new mortgage, and her monthly payment has jumped by a third in six months. She can't afford her payments and may face foreclosure if her financial situation doesn't change.

As rates on more of the adjustable mortgages, ARMs, climb and housing prices begin to dip, homeowners such as Britten who can't refinance are finding themselves trapped in too-high monthly payments. For those who can't make their payments, foreclosure is the only way out.

In the past several years, millions of Americans took equity out of their houses and refinanced when interest rates were at historical lows and housing prices were at record highs.

Anita Britten faces the loss of her Lithonia, Ga., home, where she recently played with her niece Amber Britten. She has tried without luck to refinance her adjustable-rate home loan.

Many of them chose hybrid ARMs that lenders were aggressively pushing. ARMs, which featured a low introductory interest rate that could change after a set period of time, were easier to qualify for than traditional fixed-rate loans.

ARMs are now starting to lose popularity as the difference in interest rates narrows. The average rate on a 30-year fixed-rate loan in May was 6.6 percent compared with 5.63 percent on a one-year ARM, according to mortgage lender Freddie Mac. In 2003, rates on a 30-year fixed were at 6.54 percent, while ARMs carried a 3.76 percent rate.

This year, more than $300 billion worth of hybrid ARMs will readjust for the first time. That number will jump to approximately $1 trillion in 2007, according to the Mortgage Bankers Association. Monthly payments will leap too.

For example, Britten's monthly payment jumped from $1,079 to $1,340 at the beginning of this year. It rose again on June 1 by another $104 and is scheduled to increase again in December.

Britten, who is also paying off student loans, went to a credit counseling service to help her avoid foreclosure.

"ARMs are a ticking time bomb," said Brad Geisen, president and chief executive of property tracker Foreclosure.com. "Through 2006 and 2007, I'm pretty sure we'll see a high volume of foreclosures."

With healthy job growth and a heated housing market, Central Texas is seeing a slowing in foreclosure activity so far this year.

There were 2,358 properties in Travis County posted for foreclosure through the July 4 auction, a 10 percent decline from the first seven months of 2005, according to figures by the Addison-based Foreclosure Listing Service Inc.

In Williamson County, foreclosure postings year-to-date are down 11 percent for the year; postings are down 9 percent in Hays County year-over-year.

Even with the recent declines, though, the numbers remain high in Central Texas compared with a few years ago. The number of postings in Travis County to date this year is 62 percent higher than during the same period in 2002, while the number in Williamson County is 86 percent higher.

Nationwide, foreclosures hit a historical low last year at about 50,000. But that number has more than doubled since, according to Foreclosure.com.

And delinquency rates appear to be rising, as well. While delinquency rates fell for most types of loans from the fourth quarter of 2005 because of a stronger economy, delinquencies for both prime and subprime ARM loans increased year-over-year in the first quarter, according to the Mortgage Bankers Association.

As the housing market slows, experts expect foreclosures to skyrocket in those areas that have experienced the highest appreciation rates — like California, Florida, Virginia and Washington, D.C.

"There is a direct correlation between foreclosure sales and market activity," said James Gaines, a research economist at The Real Estate Center at Texas A&M University. "If the rate of appreciation is not there, then there is an increase in foreclosure sales."

As rising interest rates cool once-hot markets at the same time that ARMs reset, many homeowners may be unable to dump their properties before going into foreclosure, Gaines said.

Nationwide, ARMs account for 24 percent of all home loans.

Some homebuyers, especially first-time buyers, may not have fully understood the risk of ARMs.

In the rush to close on a house sale, especially in the frenzied market of the past few years, many first-time buyers often failed to get the full details about their loan from their mortgage broker.

When Dora Angel of DeSoto bought her first home in 2003, she paid $141,000 for a new three-bedroom, two-bath home. At the time, her mortgage payment was $1,400 a month.

DeSoto originally thought that she had a fixed-rate loan. But about five months ago, she noticed that her monthly payment kicked up to $1,900. She only made the monthly payments by sacrificing payments on her credit cards, which pulled down her credit rating.

Now, DeSoto can't continue paying $1,900 each month, but, because of her credit ranking, she doesn't qualify for a fixed-rate mortgage.

"I was a first-time buyer. I was blind. I didn't know what questions to ask," she said.

What is a hybrid adjustable rate mortgage?

A hybrid adjustable rate mortgage features an initial low interest rate for a fixed period of time, usually three, five or 10 years. After the fixed time period, the interest rate adjusts upward, usually every six or 12 months, with a predetermined maximum. The rate can increase as much as 2 percent each adjustment.

What should I do if I have an adjustable rate mortgage?

James Gaines, a research economist at the Real Estate Center at Texas A&M University, recommends that anyone who has an adjustable rate mortgage should convert it to a fixed-rate mortgage within the next 18 months.

What should I do if I cannot make my monthly mortgage payments?

No matter what type of mortgage that you have, quickly seek out financial help from a credit counseling service if you are having difficulty fulfilling your mortgage obligation. Also, contact your lender immediately to try to work out a new payment plan if possible.

Local consumer credit counseling services can be found through the National Foundation for Credit Counseling web site at www.debtadvice.com.