One of the problems leading to an increase in foreclosures is the instance of upside down mortgages. These are situations in which there is negative equity in the home -- meaning that the home owner owes more than the home is worth.
Much of this comes from a combination of falling home values and home mortgage financing techniques that lead to negative amortization. It is important to carefully consider your home loan terms before buying, and to realize that having good credit and a down payment may not protect you from negative equity down the road.
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