2010 Real Estate Guide
House and sky
Invisible threat to home values

Still, with one-third of all borrowers under water, not all are found in new developments that already exhibit telltale signs of owners' mortgage misfortune.

In fact, says Khater, it's not until mortgage debt falls about 20 percent below a home's value that foreclosures start occurring with more frequency.

A matter of public record

Because neighborhoods cluttered with underwater owners are likely to see further value drops, Evan Feldman, an agent with ZipRealty in Wellington, Fla., says he tries to alert buyers to this threat: "I try to educate them as much as I can; I don't want them saying later, 'How could you not tell me this?'"

While it may seem that the size of a homeowner's mortgage is strictly between the homeowner and the lender, mortgage data are public record. County recorders or county clerks record a lien for the amount of a mortgage each time a loan is made.

Some counties offer these records online to the public. Users can search using a borrower's name, or by address or by securing personal identification numbers from other online tax records.

Although it may feel as if they're prying into neighbors' financial lives, homeowners worried about what's happening to values in their neighborhood can use these data as another indicator of what's ahead.

Online access is not available in all counties. Many still keep records at the courthouse the old-fashioned way, says Jacqueline Byers, director of research and outreach, National Association of Counties.

Remember, too, warns Byers, that mortgage balances recorded don't reflect amounts that borrowers have paid down through monthly payments or prepayments.

Consumers in counties not providing online access may find it too bothersome to dig through paper records. However, real estate agents often have the ability to get the data online through services that mine public records and sell it the information to subscribing real estate businesses, says Khater, who notes that his own company has a subsidiary providing just such services.

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