It’s been my personal experience that there aren’t as many foreclosures in the second home market as some people might think. The registry review bares out my data. Many of my clients who have purchased Ski properties either didn’t take a mortgage or could easily afforded not to but took one for the interest deduction as a tax consideration. The folks that have faced the foreclosures were by in large people who qualified for the level of financing by getting a lower adjustable rate mortgage. This meant when the rate went up two percent it effected the payments by 25-40% while the homeowners income may have increased by only 2% if they were lucky. The same was true of the refinance craze, when people with untapped equity increased their debt (by borrowing against their home) spent the money they borrowed on repairs or other things and then couldn’t sell the home for the outstanding debt. They all had the same problem with an increased expense with little or no increase in income and a property that would be hard to sell for what they owed. The answer many walked away from the debt, while the solutions are just as obvious “Don’t bite off more than you can chew” get a fixed rate you can afford and don’t be tempted to tap the equity just because you have it. The water is fine if you don’t get in too deep.