One of the things that contributes to the increases in foreclosure rates is mortgage IED’s, or improvised equity devices. These loans are genrally easy to get but are high leverage and high risk and present numerable problems when they mature. IED’s are generally ARMs that start off with low rates, but in a market like today’s they continually adjust upwards. As the interest rates rise, so does your monthly mortgage payment. When the loans have interest only payment terms, if a homeowner were to only pay the interest they could run into problems. If the value of the home goes down, the mortgage could grow to be greater than the value of the home. This could leave no room for the homeowner to bail out without having to raise the cash to cover the difference. Hence the increase in foreclosure rates.