foreclosure Bo and Ana Apostolache loved their three-bedroom home on a cul-de-sac near Irvine, Calif. when they bought it six years ago. Best of all, they could easily cover the $1,400 monthly payments on their $175,000 mortgage. Over the next few years, as interest rates dropped and their home price tripled in value, the couple refinanced several times and tapped $200,000 worth of equity to pay for home improvements - and a Barbados vacation. By 2005, although they had doubled their loan balance, their payments had increased by only $400 a month, thanks to an interest-only adjustable-rate mortgage with an initial rate of just 3.75 percent.

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