About 70 percent of the $189 billion in outstanding option ARMs will reset by 2011, the report said, which would be another setback to a teetering housing market still struggling to recover from the mortgage meltdown that precipitated the financial crisis.

One surprise is that many option ARMs have gone bad even before adjusting, suggesting that some of these borrowers didn’t stand a chance, said Sam Khater, a senior economist at First American CoreLogic. As of April, more than 35 percent of option ARMs were at least two months late even though they had not reset.

“These people were having trouble making the minimum payment, let alone dealing with the payment shock once the loan adjusted,” Khater said.

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