Reports of lenders botching mortgage rate calculations has sent homeowners scrambling to see if they're being overcharged and left bankers wondering if they're losing millions.

The controversy over adjustable rate mortgages, loans with variable interest rates, began when a former federal banking auditor estimated widespread errors in the loan portfolios of failed savings and loans in the Midwest.John Geddes, formerly with the Federal Savings and Loan Insurance Corp., estimated up to 35 percent of adjustable-rate mortages nationwide were miscalculated and borrowers were overcharged $8 billion from 1979 to 1989.

There haven't been any additional studies to confirm Geddes' statements. Officials were unclear how widespread the miscalculations may be.

"Clearly the portfolio that we were looking at is the smaller savings and loans in the Midwest. But whether the problem is broader than that, I don't know," said Steve Seelig, director of the FDIC's division of liquidation.

An adjustable-rate mortgage, or ARM, has an interest rate that fluctuates according to a financial index, such as the rise or fall of Treasury bills.

Errors may arise when a lender mistakenly uses the wrong index, calculates the index at an improper time, or lacks proper computer software to tabulate the mortgage.

Geddes' allegations in August 1989 sent shock-waves through the lending community. At least four class-action lawsuits have been filed in Indiana, saying savings and loans excessively overcharged borrowers.

The General Accounting Office, the investigative arm of Congress, issued a report on the problem in October. Federal auditors now pay special attention to the loans when reviewing the financial records of banks, credit unions and savings and loans, said Mitch Rachlis, senior economist for the GAO.

Meanwhile, the Federal Financial Institutions Examination Council, an umbrella group of federal financial services regulators, is coordinating an investigation. The move by the council shows the federal government is taking the problem very seriously, said Fritz Elmendorf, spokesman for the Consumer Bankers Association in Arlington, Va.

So, apparently, are homeowners. HSH Associates, a New Jersey mortgage information service, is marketing kits for borrowers to double check their mortgage calculations.

Paul Havemann, HSH vice president, said last week his office had gotten about 400 telephone calls in a couple of days, "and that would be a conservative guess."

Attorney George Plews of Indianapolis said he's working with attorneys in 15 other states whose clients have problems with adjustable-rate mortgages. Plews, who filed the four class-action lawsuits in Indiana, said a typical loss ranges from $200 to $1,400 over the term of the loan.

"Our information is that this is not a new problem in the industry," said Plews. "The inaccuracies in the portfolio was relative common knowledge in the late 1980s" among bank regulators.

Plews said his review shows the problem afflicts banks as well as savings and loans.

"It's almost an accident the lawsuits right now are against the S&Ls," he said.

The American Bankers Association disagreed, saying the problem now appears to be confined to just savings and loans. Spokeswoman Tara Little said some lenders have reviewed their portfolios and found "almost no errors."

Industry officials said they were unaware of any consumers avoiding ARMs in light of the recent publicity.

Some analysts say the bulk of the errors may even be in consumers' favor. Others say the damage is evenly split.

"The adjustable-rate mortgage problem is more a problem of complexity as opposed to a problem of greed," Seelig said.