Last updated on June 14th, 2026 at 06:10 pm
The 90-Day Problem Most Forbearance Sellers Don’t See Coming
The real answer — and why timing matters more than anything else
What You Actually Need to Know
Skip the legal jargon. Here’s the real situation:
1. Yes, you can sell while in forbearance. But here’s the catch: you need equity, and your lender has to sign off. Don’t expect easy approval if you’re underwater on the mortgage.
2. Those missed payments don’t disappear. They come straight out of your sale proceeds before you see a dime. If you owe $220K and you’re missing $8K in payments, that $8K gets subtracted from what you walk away with. Not from the lender. From you.
3. Timing is everything. Sell before forbearance ends, not after. Once that period ends, your lender starts expecting payment or a plan. The longer you wait, the fewer options you have.
4. Tell your lender NOW, not later. Don’t wait until forbearance is almost over to call them. A quick email or call saying “I’m planning to sell this property” prevents nasty surprises at closing. Lenders can get stubborn when they feel like you’re hiding something.
What Forbearance Actually Is (And Isn’t)
Forbearance feels like relief. It is relief. Your lender is basically saying “we won’t collect from you for a few months.” But it’s not forgiveness. Every dollar you don’t pay now, you still owe later. That’s the part people don’t fully understand until it’s time to deal with it.
How It Actually Works
You call your lender and say you’re in financial trouble — job loss, medical emergency, divorce, whatever. If they approve forbearance, here’s what happens:
- They pause your monthly payments (usually 3–12 months)
- Interest might still accrue depending on your agreement
- You don’t make payments during that period
- But those payments? Still owed. Deferred, not forgiven
- Your credit might take a hit if payments show as late — depends on the lender
At the end of forbearance, your lender contacts you with options: repay everything at once (impossible for most people), set up a repayment plan, modify the loan, or sell. That’s where you need a plan.
Texas Forbearance: The Speed Problem
Here’s what’s different about Texas compared to other states: we allow non-judicial foreclosure. Translation? Your lender doesn’t need a judge to foreclose on you. They can do it fast.
And they will.
The Timeline You Need to Take Seriously
Forbearance ends, your lender sends notice. Here’s how fast things move in Texas:
- Days 1–21: Notice posted on the property
- Days 21–60: Lender’s attorney advertises the foreclosure sale
- Day 60+: Property sold at auction at the county courthouse
You could go from “forbearance ended” to “property sold” in less than 90 days. This is how Texas law works. Don’t wait until forbearance ends to think about selling — you need to be listing or accepting a cash offer while you still have leverage and time.
Property Taxes Don’t Stop
Your property taxes don’t care about forbearance. If your mortgage includes an escrow account and you’re not paying the mortgage, the taxes might not be getting paid either. Call your lender and ask directly: “Are my property taxes current during forbearance?” Tax liens are serious — they can foreclose on you too.
HOA Foreclosure Is Real and Faster Than You Think
If your property is in an HOA and you’re behind on dues, the HOA can foreclose faster than your mortgage lender. Houston and Dallas are heavily HOA-governed markets. Check your escrow account right now. If HOA fees aren’t being paid during forbearance, you could face foreclosure from the HOA while you’re still negotiating with the mortgage lender.
This Actually Happens in Texas
Forbearance situations where the HOA foreclosed first aren’t rare. Now the homeowner is dealing with two entities and has lost control of the situation. Get your HOA account status before you do anything else.
Texas Homestead Exemption Won’t Help You
Texas homestead laws protect your home from most creditors — but not from your mortgage lender. Your lender can foreclose on your primary residence just like any other state. Don’t count on the homestead exemption. It won’t apply here.
How to Actually Sell (Real Steps)
Step 1: Get the Payoff Number in Writing
Call the number on your mortgage statement. Say: “I’m thinking about selling my home. Can you send me a payoff statement?” They’ll send you a document showing loan principal balance, deferred payments owed, interest accrued, fees charged, and the total payoff. That number is the truth. Get it in writing. Keep it.
Step 2: Find Out What Your House Is Worth
Pull up Zillow, check Redfin, or ask a local realtor for a free CMA. Do basic math: home value minus payoff equals what you might actually get. If you owe $250K and your home is worth $280K, you’re working with roughly $30K before closing costs eat into it. If you owe $250K and the home is worth $240K, you’re underwater and everything gets harder.
Step 3: Decide How You Want to Sell
List with a realtor (traditional sale):
- You might get $15K–$25K more than a cash offer
- But you’re waiting 60–90 days hoping a buyer shows up and gets financing
- Realtor takes 5–6% commission off the top
- Closing costs are another 2–3%
- You’re stressed for 3 months while forbearance ticks down
Cash offer from an investor (7–14 day close):
- You get paid fast — certain, no guessing
- No financing contingency, no “will they get approved?”
- Offer is 15–25% below market because the investor absorbs repair costs and risk
- You make less money, but you’re done in two weeks
Listing might net you $265K after commissions and costs. Cash offer might be $235K. The difference is $30K. But if forbearance ends in 60 days and you haven’t sold yet, that cash offer suddenly looks a lot smarter. Time is worth money.
Step 4: Tell Your Lender
Send an email or certified mail that says: “I plan to sell this property. Sale proceeds will pay off the mortgage in full.” At closing, the title company contacts your lender to verify consent. If this is the first they’re hearing about it, they can cause problems. Lenders get difficult when blindsided.
Step 5: Close and Move On
At closing, the title company pays out in this order: realtor commission if applicable, closing costs (2–3%), your lender’s payoff (principal plus deferred payments plus interest plus fees), any property tax liens or HOA liens, and whatever’s left is yours. You don’t touch the money. Title company handles it. Clean break.
Under Texas Property Code § 5.008, you’re required to disclose known material defects on the TREC Seller’s Disclosure Notice regardless of your forbearance status. That obligation doesn’t change.
What If Selling Isn’t Your Best Move?
Loan Modification
If your hardship is temporary but you want to stay, ask about loan modification. Your lender changes the terms — lower interest rate, extended term, sometimes even principal forgiveness (rare). It requires application and approval, but it can work if you’re returning to work soon or expecting income to improve.
Repayment Plan
Many lenders will let you spread deferred payments over 6–12 months instead of demanding a lump sum. You must be able to afford both regular payments plus catch-up payments, though — if that math doesn’t work, this option doesn’t either.
Get Help From HUD
HUD offers free housing counseling. The Consumer Financial Protection Bureau (CFPB) can help you find a HUD-approved counselor in your area. They review your specific forbearance terms and help you understand your options. It’s free. Use it.
Mistakes People Make
Waiting Too Long
The biggest one. If forbearance ends in 60 days, you’re already in the window where things move fast. Start the process immediately.
Not Getting Payoff Number in Writing
Your lender verbally says “Oh, you owe about $235K.” Then at closing it’s actually $245K with all the fees and interest. Get the payoff statement in writing — signed document from the lender, not verbal, not email.
Hiding the Sale From Your Lender
Some people think they can list quietly and surprise the lender at closing. Don’t. Lenders can refuse to cooperate and hold up closing. Tell them upfront.
Forgetting About Property Taxes and HOA
Both come out of your proceeds. If you haven’t checked these, you’ll lose money you weren’t expecting to lose. Check them now.
Taking the First Cash Offer
Get 2–3 quotes. Cash buyers know you’re under pressure. Even a 5% difference on a $250K home is $12,500. Shop around before you sign anything.
Related Resources for Texas Sellers in Forbearance
- How to Stop HOA Foreclosure in Texas — Understand HOA foreclosure risk
- Seller Credits and Closing Costs — What comes out at closing
- Home Appraisals and Low Appraisals — Understanding property value
- How to Sell a House in Texas: Full Guide — Complete selling process
Sources & Official Resources
- Consumer Financial Protection Bureau (CFPB) — Find HUD-approved housing counselors and forbearance guidance
- Texas Property Code § 5.008 — Seller disclosure requirements for material defects
- IRS Publication 523 — Capital gains tax on home sales
Need to Sell Your House Fast in Texas?
If forbearance is ending and you need a quick, certain solution, we buy houses throughout Texas. Cash offer in 24 hours with no obligation.
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