While a growing number of consumers are looking to cash in on the changing real estate market, another group is trying to figure out how to keep from cashing out. The 115,292 homes nationwide entering some stage of foreclosure in August remains historically low, but the rate of increase in the number is becoming alarming. August foreclosures represented a 24 percent increase from July — the second highest this year — foreclosures are up 38 percent for the year so far and 53 percent compared to where they were this time last year.

Blame it on those nasty mortgage IEDs (Improvised Equity Devices) — high leverage, high risk loans that are easy to come by, but financially explosive as time goes by. Mortgage IEDs are typically ARMs, in a host of varieties, that typically start off with low rates, but, in this market, continually adjust upward. Along with the higher interest rate, so goes your monthly mortgage payment. When the loans come with interest-only payment terms, if you only pay the interest and your home value shrinks, your mortgage could become larger than your home’s value giving you no room to bail out without coming up with the cash to cover the difference.

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