When the bank foreclosure notice arrived in Susan Malone's mailbox in September, she became so depressed she started packing her things, although she has nowhere to go.

With no savings and $3,200 in past due mortgage payments on her Mt. Lebanon duplex, Ms. Malone, a self-employed massage therapist and house cleaner, has no way of catching up and so far has gotten nowhere trying to negotiate a loan modification with her lender.

"From day to day you don't know what to do," she said. "Do I just sell everything I own and move out to California and live in a tent? Or do I continue to fight? The stress is quite literally probably killing me."

Ms. Malone, 51, finds herself among the many who got into home loans that were unaffordable from the start and are now struggling to hold onto property that is worth less than what is owed on it. By the end of September, 937,840 homes received a foreclosure letter, which means one of every 136 homes in the United States was in foreclosure, according to a RealtyTrac report.

While Ms. Malone's situation has deteriorated in the past year, the groundwork for her problems was laid back when she bought the property.

The loan came with a very high initial interest rate of 7.99 percent and, because the mortgage is adjustable, the interest rate and her payments continue to go up every six months.

Making matters more complicated, her lender, Wells Fargo, added an additional $800 a month to the mortgage to cover last year's unpaid back taxes and escrow for next year's property taxes, resulting in monthly payments rising from $1,075 a month three years ago to $2,400 a month now.

"If I lose this home, I will be homeless. That's all there is to it," said Ms. Malone, whose parents are deceased. She said she is estranged from an older sister.

Ms. Malone bought the duplex in April 2006 for $183,400, taking out a $146,720 first mortgage and a $36,680 second mortgage.

The house was appraised in June for $148,000, about $35,000 less than she paid for it. Her monthly payments have done little to reduce the principal after three years of ownership.

At this point, her hopes ride on reaching a loan-modification agreement. She and a Wells Fargo representative attended a county reconciliation hearing last week in which she asked the company to either adjust her principal balance or the interest rate in order to reduce the payments.

A judge has delayed Ms. Malone's foreclosure while the two parties try to work things out. Wells Fargo representatives have given her no indication of when they will have a response. Company officials also did not reply to an interview request for this report.

"If you look at Susan's [finances], she could never afford this house. That's why it's going to be difficult for her to get a deal," said Dan Sullivan, a mortgage foreclosure prevention specialist at Action-Housing Inc., who attended the hearing with her.

Reconciliation hearings are required in Allegheny County before sheriff's deputies can serve an eviction notice.

"To her credit, she is plugging away," Mr. Sullivan said. "She has applied to every mortgage-assistance program on the state and federal level, but all those resources are flawed [in that she doesn't qualify]. The only [entity] that can help her is the mortgage company."

Mr. Sullivan said the mortgage broker who sold her the loan is no longer in business, and America's Serving Co., which is owned by Wells Fargo, will not release underwriting records that would show how her financial numbers were manipulated to qualify for the mortgage.

Still, for a while, things went fine after Ms. Malone moved in.

With the $900 a month she receives from the tenant renting part of the duplex and the $600 to $700 a week she makes cleaning houses and doing the occasional massage, she was able to stay current on her mortgage, make $459-a-month lease payments on her 2006 Saturn Vue and making $350-a-month payments on five credit cards with $10,000 in total balances.

Financial problems began to surface in December when Wells Fargo notified her that her property taxes were delinquent, a claim she denies. She said she had worked out an arrangement with government officials to make installment payments; however, the bank was not satisfied with that and made the tax payment in full. By March, the company was requiring her to pay an additional $800 a month. She, instead, continued to make the regular payment without including the escrow.

In September, Wells Fargo initiated the foreclosure process, and she quit paying altogether.

"I've been trying to work with them for months to try to resolve this escrow issue, but there is no middle ground with them," said Ms. Malone, a Brookline native.

She said she felt rushed through the loan process and never fully understood that the mortgage carried an adjustable rate, which is now up to 8.2 percent. She said she didn't realize it until she read the documents a year later in April 2007 while preparing her taxes.

The tenant is aware of the financial problems Ms. Malone is having, partly because she told the renter and partly because creditors have been contacting the tenant and other neighbors in an effort to reach her.

Many days she comes home from work and is too depressed and exhausted to cook or clean. She's spent many sleepless nights and lives in constant fear of what the future might bring.

"It's hard to think of starting over," she said. "I'm 51 now. So let's say it takes three or four years to bring my credit up enough that I can go and start shopping for a mortgage. Will somebody be willing to give me a mortgage being self-employed and 55?

"But you ask yourself is it time to walk away and live to fight another day. I don't think Wells Fargo and I are that far apart to just give up now. That's why I'm thankful for the reconciliation process."

Doug Oster writes a blog, "Growing With Doug," exclusively at PG+, a members-only web site of the Pittsburgh Post-Gazette. Our introduction to PG+ gives you all the details.