Behind on the Mortgage in Kaufman or Forney? Short Sale Isn't Always the First Move

The question

Maybe a certified letter from your servicer just showed up saying you're in default. Or maybe you haven't missed a payment yet, but the payment is crushing you and you can see where it's headed.

A lot of what's online says, "Do a short sale." Is that right?

The straight answer

Maybe. But a short sale is one tool, not the first move.

The first question is simple: do you have equity, or are you underwater? In other words, if you sold today, would the sale cover your loan payoff plus selling costs? Nobody can answer that without your real payoff and real comps.

The clock is real

Texas foreclosures usually don't go through a court, so things can move fast:

• 20 days to cure. Your servicer has to mail you a default notice giving you at least 20 days to catch up.
• 21 days' notice of sale. It's posted at the courthouse, filed with the county clerk, and mailed to you.
• First Tuesday of the month, 10 a.m. to 4 p.m., at the county courthouse. For Kaufman and Forney, that's the Kaufman County courthouse.

Federal rules help too. A servicer generally can't start foreclosure until you're more than 120 days behind. And if it gets a complete help application from you more than 37 days before a sale, it generally can't hold the sale while it reviews you. Keep copies of everything and write down every date.

Your options, in order

1. Sell with equity. If the numbers work, a regular sale protects your credit and may put cash in your pocket. In Forney, Redfin shows homes taking about 60 days and closing about 2% under list. DirectList found seller concessions in about 3 of 4 August sales, averaging just over $11,000. Plan for that.
2. Ask your servicer for help. This is called loss mitigation. A loan modification changes your loan terms. A forbearance pauses or lowers payments for a while (it doesn't erase them). A repayment plan spreads what you owe over future payments. Get it in writing, and don't sign what you can't afford.
3. Short sale, only if you're truly underwater. You sell for less than you owe, with the lender's OK. Ask your attorney whether the lender releases the leftover balance.
4. Deed-in-lieu. You hand the house back to the lender. Usually a last resort.

A HUD-approved housing counselor can help you for free.

Ways to get a lower rate (or payment) right now

If you want to keep the house, here's what's on the table:

• Ask for a rate cut in a modification. The CFPB says a modification can lower your rate, stretch out your term, or reduce or defer principal. Ask how it changes your payment and what you'll owe long-term.
• VA loan? Ask about an IRRRL. It's VA's streamlined refinance to a lower rate or from an adjustable to a fixed rate. Lenders look at your payment history, so ask early.
• FHA loan? Ask about a Streamline Refinance. Your loan has to be current, and the new loan has to clearly benefit you (for a fixed-to-fixed refi, generally a 5%+ lower payment including mortgage insurance).
• Have equity? A regular refinance may work. Only if the new rate and costs actually lower your payment. Divide closing costs by monthly savings to see how long it takes to break even.
• Shop more than one lender. Mortgage credit checks within 45 days count as one inquiry.
• Next home after you sell? Ask the seller for a 2-1 or 1-0 buydown, look at assumable VA or FHA loans, compare VA/FHA vs. conventional, or buy points. Get your credit in shape first, because higher scores generally get lower rates.

No refinance or modification is guaranteed, and rates may not drop. The goal is a payment you can actually keep.

A Forney example, math only

Made-up illustration. Not a client, not your house, not a loan offer.

Say you bought in Forney in mid-2022 for $360,000 with an FHA loan, 3.5% down, at 5.70% (Freddie Mac's 30-year average the week of June 30, 2022). The 1.75% upfront mortgage insurance was rolled in, so you started at about $353,480. After about 51 payments, you'd owe roughly $332,000.

Now say it sells for $335,000, about Forney's median of $334,778 (Redfin, three months ending August 2026, down 5.5% from last year).

That's underwater. If you're behind, it's worse, because missed payments, interest, and fees get added on.

Now change one thing: same house, but 10% down on a conventional loan at the same rate. You'd owe about $304,300, and that sale nets about +$3,900. That's a regular sale. Same house, different answer. That's why the net sheet comes first.

Before you call the servicer alone

Text me at 972-951-6987. I'm a realtor and a licensed loan officer. I'll run a confidential net sheet and look at your loan options before anyone says "short sale." You'll know your numbers and your dates before you pick up the phone.

— Dylan Hernandez, USMC Gunnery Sergeant (Ret.) | Team Leader, DH Real Estate Group | dylanhernandezsellsdfw.com

Disclosures

This article is for general information only. It is not legal, tax, or financial advice. The example is a hypothetical illustration, not an appraisal, net-sheet guarantee, rate quote, loan offer, or commitment to lend. The 5.70% figure is a historical Freddie Mac weekly average used only to estimate a loan balance; it is not an offered rate, and no APR is implied. Your payoff, value, and costs will differ. Loan modifications, refinances (including VA IRRRL and FHA Streamline), short sales, deeds-in-lieu, and other loss mitigation options are subject to your lender's or servicer's approval and program rules. Rates may not go down, and no rate reduction is guaranteed. Talk to a Texas real estate attorney about foreclosure timelines, deficiency, and any release of remaining balance, and talk to a CPA about Form 1099-C and cancelled-debt income. The federal exclusion for forgiven debt on a principal residence (qualified principal residence indebtedness) generally does not apply to debt discharged on or after January 1, 2026, unless it's covered by a written arrangement entered into before that date. Other exclusions, such as insolvency, may apply. Not all applicants will qualify for any loan or program.

Dylan Hernandez, Licensed Loan Officer, NMLS #2681224, One Real Mortgage, NMLS #198414. Equal Housing Opportunity. Real estate brokerage services provided by Real Broker, LLC. Dylan Hernandez, TREC #0787987. Texas Real Estate Commission Information About Brokerage Services | Texas Real Estate Commission Consumer Protection Notice

Sources (accessed October 5, 2026)

1. Texas Property Code § 51.002, Sale of Real Property Under Contract Lien (20-day cure notice, 21-day notice of sale, first-Tuesday sales 10 a.m.–4 p.m. at the county courthouse): https://statutes.capitol.texas.gov/Docs/PR/htm/PR.51.htm#51.002 (text read via https://texas.public.law/statutes/tex._prop._code_section_51.002, because the official page didn't load for automated access)
2. 12 CFR 1024.41, Loss mitigation procedures (120-day pre-foreclosure review; complete application more than 37 days before sale): https://www.ecfr.gov/current/title-12/chapter-X/part-1024/subpart-C/section-1024.41
3. CFPB, "If I can't pay my mortgage loan, what are my options?" (modification, repayment plan, forbearance, short sale, deed-in-lieu; HUD-approved counselors): https://www.consumerfinance.gov/ask-cfpb/if-i-cant-pay-my-mortgage-loan-what-are-my-options-en-268/
4. CFPB, "What is a mortgage loan modification?" (may extend the term, reduce the interest rate, and/or forbear or reduce principal): https://www.consumerfinance.gov/ask-cfpb/what-is-a-mortgage-loan-modification-en-269/
5. CFPB, "What is a repayment plan on a mortgage?": https://www.consumerfinance.gov/ask-cfpb/what-is-a-repayment-plan-on-a-mortgage-en-280/
6. CFPB, "Avoid foreclosure" (forbearance described): https://www.consumerfinance.gov/housing/housing-insecurity/help-for-homeowners/avoid-foreclosure/
7. Redfin, Forney, TX housing market ($334,778 median sale price, three months ending Aug. 2026, −5.5% YoY; ~60 days on market; ~2% below list): https://www.redfin.com/city/6808/TX/Forney/housing-market
8. DirectList, Forney market snapshot (Aug. 2026 MLS closings; concessions in ~3 of 4 sales, avg. just over $11,000): https://direct-list.com/home-values/forney
9. Freddie Mac PMMS, June 30, 2022 (30-year fixed averaged 5.70%): https://freddiemac.gcs-web.com/news-releases/news-release-details/mortgage-rates-pause-their-ascent
10. HUD Mortgagee Letter 2023-05 (FHA upfront MIP 1.75%): https://www.hud.gov/sites/dfiles/OCHCO/documents/2023-05hsgml.pdf
11. IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments: https://www.irs.gov/pub/irs-pdf/p4681.pdf
12. 26 U.S.C. § 108(a)(1)(E) (QPRI exclusion: discharges before Jan. 1, 2026, or under a written arrangement entered into before then): https://www.law.cornell.edu/uscode/text/26/108
13. Congress.gov, H.R. 917, Mortgage Debt Tax Forgiveness Act of 2025 (status: introduced and referred to Ways and Means; not enacted as of access date): https://www.congress.gov/bill/119th-congress/house-bill/917
14. Competitor context (not quoted): Moomaw Realty Group, Kaufman and Forney short-sale posts, Oct. 2, 2026: https://www.moomawteam.com/blog/short-sale-kaufman-tx-foreclosure-timeline-2026/ and https://www.moomawteam.com/blog/short-sale-forney-tx-underwater-math-2026/
15. VA, "Interest rate reduction refinance loan" (IRRRL; lower rate or ARM-to-fixed; break-even tip): https://www.va.gov/housing-assistance/home-loans/loan-types/interest-rate-reduction-loan/
16. HUD, "Streamline Refinance Your Mortgage" (existing FHA loan must be current; net tangible benefit; $500 cash-out limit): https://www.hud.gov/hud-partners/single-family-streamline
17. HUD Handbook 4155.1, Ch. 6, Sec. C, Streamline Refinances (net tangible benefit: at least 5% reduction in P&I plus MIP for fixed-to-fixed): https://www.hud.gov/sites/documents/4155-1_6_secc.pdf (current requirements are in HUD Handbook 4000.1, II.A.8)
18. CFPB, "What happens when a mortgage lender checks my credit?" (multiple mortgage inquiries within 45 days count as one): https://www.consumerfinance.gov/ask-cfpb/what-exactly-happens-when-a-mortgage-lender-checks-my-credit-en-2005/
19. CFPB, "Mortgage financing options in a higher interest rate environment" (temporary buydowns, ARMs, most FHA/VA/USDA loans assumable): https://www.consumerfinance.gov/archive/blog/mortgage-financing-options-in-a-higher-interest-rate-environment/
20. CFPB, "Explore interest rates" (credit score and loan type affect rates; VA/FHA can offer lower rates): https://www.consumerfinance.gov/owning-a-home/explore-rates/
21. CFPB, "How should I use lender credits and points (also called discount points)?": https://www.consumerfinance.gov/ask-cfpb/what-are-discount-points-and-lender-credits-and-how-do-they-work-en-136/
22. VA, "Temporary Buydowns" (seller/builder-funded buydowns count toward VA's 4% seller-concession cap): https://www.benefits.va.gov/homeloans/temporary-buydown.asp