Over $100,000 Behind and Underwater? Every Way Out
Owing more than your home is worth and being far behind on payments feels like a dead end. It is not. Servicers lose money in foreclosure, and that gives you leverage when you approach them the right way.
Note: the story below is a composite based on common client situations, with details changed.
The numbers behind the squeeze
Rates: the 30-year mortgage rate averaged 7.4% on October 8, 2026, the highest since November 2023 and seven straight weekly increases (Freddie Mac).
Foreclosure spike: 227,548 properties had a foreclosure filing in the first half of 2026, up 21% from 2025 and 28% from 2024. Completed foreclosures jumped 33% (ATTOM).
Hot spots: Florida has the highest rate in the country, with 1 in every 373 homes receiving a filing (ATTOM).
What "underwater" and "far behind" mean
Underwater: you owe more than the home is worth.
Far behind: missed payments, fees, interest, taxes and insurance advances add up, sometimes to six figures.
Together, they mean a regular sale will not pay off the loan. You need a lender-approved path.
Story: six figures behind and under water
The Thompson family had a hardship, a long delinquency and a balance above the home's value. Their lender had already started foreclosure.
We compared what they would net at auction versus an approved short sale, and negotiated the approval, a release of any remaining claim where the lender agreed, and a closing date. The foreclosure stopped and they left with no auction on their record.
Every option we look at
Loan modification: capitalize arrears and lower the payment if you can stay.
Repayment or forbearance plan: catch up over time.
Partial claim: on FHA and some loans, move the past-due amount to a separate balance.
Short sale: the lender accepts less than the balance.
Deed in lieu: you hand the property back to settle the debt.
Cash sale: a fast sale to us when equity or approval allows.
Creative finance: subject-to, wraparound or owner finance.
Credit and tax questions
A short sale or deed in lieu usually hurts credit less than a completed foreclosure. Forgiven debt may have tax consequences, so speak with a tax professional.
Frequently asked questions
Can I sell if I owe more than it is worth? Yes, with lender approval through a short sale or a negotiated payoff.
Will I owe the difference? It depends on what the lender agrees to in writing. We negotiate for a release.
Underwater and behind? Call Trusted Home Gurus for a free, confidential review.
