What Are My Options If I Am Behind on My Mortgage in Palm Beach County?

Short answer: If you are behind on your mortgage in Palm Beach County you have six real options — reinstate or refinance, a loan modification, an open-market sale if you have equity, a short sale if you are underwater, a deed in lieu, or letting the foreclosure run — and every one of them except the last gets narrower the longer you wait.

Start with the number, not the fear

Almost every homeowner who calls us in this situation assumes they are in a short sale. Most are not. Palm Beach County values have risen a long way over the past decade, and a great many owners who have missed payments still hold real equity. That single fact changes which of the six options below applies to you, and it is knowable in a couple of days rather than guessed at.

So before anything else: establish what the property is worth today, and get a current payoff figure from every lienholder. Everything else follows from the gap between those two numbers.

Your six options, strongest first

1. Reinstate or refinance. If the setback was temporary, catching up the arrears or refinancing where equity and credit allow ends the problem outright.
2. Loan modification or forbearance. Lenders would generally rather modify than foreclose. A modification can change the rate or term, or move arrears to the back of the loan. Apply through your servicer’s loss-mitigation department and get every submission confirmed in writing.
3. Sell on the open market. If the property is worth more than you owe, you are not a distressed case — you are a seller with equity to protect. A properly marketed sale pays off the loan and puts the balance in your pocket instead of losing it to foreclosure costs and auction pricing.
4. Short sale. If you owe more than the property is worth, the lender can be asked to accept less and release the lien. See how a short sale works in Palm Beach County, and pay particular attention to the deficiency waiver.
5. Deed in lieu of foreclosure. Handing the property back by agreement. Occasionally right, but it should be compared carefully against a short sale, which usually gives more negotiating room on both the shortfall and the move-out date.
6. Do nothing. The case proceeds to judgment and auction, the price is set by the auction rather than by the market, and any equity is consumed by costs. This is the only option that gets worse with time rather than simply narrower.

The deadlines that actually close doors

Florida is a judicial foreclosure state, which means the lender has to file a lawsuit and obtain a court judgment before the property can be sold at auction. That is slow, and the slowness is on your side: it is usually long enough to execute an alternative if you start early. The sequence runs from missed payments, to a default notice, to a foreclosure suit with a lis pendens recorded, to being served with a summons, to judgment, to the auction date.

The one hard deadline to know: after you are served with a foreclosure summons and complaint in Florida you generally have 20 calendar days to file a written response with the court. Those 20 days run from service, not from the date the lis pendens was recorded. If no response is filed the lender can seek a default, which accelerates everything. Filing that response is legal work — call a Florida attorney the day you are served.

Running alongside the court clock is a federal one that most homeowners never hear about: your servicer generally cannot make a first foreclosure filing until the loan is more than 120 days delinquent, and a complete loss mitigation application filed before that first filing blocks it while the application is evaluated. Short Sale Guide sets out what your servicer is required to consider, with the regulation cited.

Expect the letters, and read this before you answer them

A lis pendens is a public record, so within days of filing you should expect a wave of letters and calls from investors and cash-offer operators. Some are legitimate businesses. Many are pricing your stress rather than your property, and the offers reflect it. Nothing about your situation requires you to sign anything today. Know what the property is worth first, and never sign over a deed to solve a payment problem without a lawyer reading the document.

Who you are talking to

Gia Freer, our Broker of Record, holds NAR’s Short Sales and Foreclosure Resource (SFR) certification, is Certified Distressed Property Expert (CDPE) trained, and has been licensed in Florida since 2000. PBP Real Estate has negotiated distressed sales in Palm Beach County since 2008, through the last major downturn and every market since.

These conversations are confidential and there is no cost to having one. If it turns out you have equity and a straightforward sale is the answer, we will tell you that and handle it as an ordinary listing — see selling your home.

Questions and answers

This page covers the real-estate side only. It is not legal or tax advice. Decisions about foreclosure defence, probate, bankruptcy or forgiven debt should involve a Florida attorney, and anything touching money or taxes should involve a CPA. We work alongside both every week and can refer you.

Written and reviewed by Gia Freer, Broker of Record, PBP Real Estate, LLC · Florida broker license BK689801 · brokerage license CQ1064615.