Quick Answer: If you are behind on mortgage payments, you have options before foreclosure. A short sale allows you to sell the home for less than what you owe with lender approval. Other options include loan modification, forbearance, and deed in lieu of foreclosure. Acting early gives you the most choices and the least damage to your credit.
What Is Pre-Foreclosure?
Pre-foreclosure is the period between when a homeowner falls behind on mortgage payments and when the lender completes the foreclosure process. In Florida, foreclosure is judicial, meaning the lender must file a lawsuit and obtain a court judgment. This process typically takes 6 to 12 months or longer, giving homeowners time to explore alternatives.
The pre-foreclosure period is your window of opportunity. The sooner you act, the more options you have. Ignoring the situation only makes it worse and limits your choices.
What Is a Short Sale?
A short sale occurs when you sell your home for less than the outstanding mortgage balance, with the lender's approval. The lender agrees to accept the sale proceeds as satisfaction (or partial satisfaction) of the debt. Short sales require lender approval for the purchase price, and the process can take 60 to 120 days or more depending on the lender.
Benefits of a Short Sale
- Less credit damage than a foreclosure (typically 2-3 years to recover vs. 5-7 for foreclosure)
- You may qualify for a new mortgage sooner
- Avoids the public record of a foreclosure judgment
- The lender may waive the deficiency balance
- You maintain more control over the timeline and process
What Other Options Exist?
Loan Modification
A loan modification changes the terms of your existing mortgage to make payments more affordable. This may include reducing the interest rate, extending the loan term, or adding missed payments to the balance. Contact your loan servicer as soon as you anticipate difficulty making payments.
Forbearance
Forbearance is a temporary agreement with your lender to reduce or pause mortgage payments for a set period. It is designed for short-term financial hardship. You must repay the missed amounts, either through a lump sum, a repayment plan, or a loan modification at the end of the forbearance period.
Deed in Lieu of Foreclosure
A deed in lieu involves voluntarily transferring ownership of the property to the lender in exchange for release from the mortgage obligation. This is typically a last resort when a short sale is not feasible. It still impacts your credit but is generally viewed more favorably than a foreclosure.
What Is the Florida Foreclosure Timeline?
Florida uses a judicial foreclosure process:
- Missed payments (typically 3-6 months before the lender files)
- Lender files a lis pendens (notice of pending lawsuit)
- Homeowner is served and has 20 days to respond
- Discovery and mediation (if applicable)
- Summary judgment or trial
- Foreclosure sale (at least 30 days after judgment)
Facing Financial Hardship? You Have Options
Barrett Henry, Broker Associate at REMAX Collective, has helped homeowners navigate pre-foreclosure and short sales with discretion and professionalism. Call (813) 733-7907 or request a confidential consultation.
Frequently Asked Questions
Will a short sale ruin my credit?
A short sale does impact your credit score, typically by 100 to 150 points. However, the recovery time is shorter than a foreclosure. Many short sale sellers qualify for a new mortgage within 2 to 3 years.
Do I owe money after a short sale?
It depends on whether the lender waives the deficiency. In Florida, lenders can pursue a deficiency judgment for the difference between the sale price and the mortgage balance unless they agree otherwise. Negotiating a full waiver is a key part of the short sale process.
Can I do a short sale if I am current on payments?
It is difficult but not impossible. Most lenders require evidence of financial hardship before approving a short sale. If you owe more than the home is worth but can still make payments, a loan modification may be a better option.
How long does a short sale take?
From listing to closing, a short sale typically takes 3 to 6 months. The lender's review and approval process is the primary source of delay. Working with an agent experienced in short sales helps keep the process on track.
For homeowners who have inherited property, our probate and estate sales guide provides information on that process. If you are looking to sell under normal circumstances, review the home selling timeline.