Underwater on Your Mortgage and Need to Sell??? Help!!!

Are you “underwater” on your mortgage — owing more than what your home is worth — and feeling trapped?
Short sales, pre-foreclosure options, and strategic moves may offer you a way out that’s far less destructive than foreclosure.

I’m Mark Stillings, Associate Broker, M.B.A. — Short Sale Foreclosure Specialist. With over 20 years helping sellers navigate distressed-sale situations in San Antonio, I’ve seen and resolved nearly every twist and turn this process can take. Let me walk you through the short sale process, including how it interacts with foreclosure, pre-foreclosure, deficiency judgments, and more — with a focus on what matters most in San Antonio / Bexar County.

Why Short Sales Matter — Especially in San Antonio Now

• In April 2025, one in every 2,326 homes in San Antonio entered foreclosure. (TPR)
• Texas is among the leaders in foreclosures and distressed sales currently. (crisp)
• In Bexar County, there are over 3,800 pre-foreclosure properties in the pipeline. (sellmyhousefastsatx.com)
• Active short sale listings in Bexar County number in the dozens. (Zillow)

Humans facing mortgage distress need real, actionable solutions — and short sales often offer a lifeline.

Key Terms You Should Know (SEO & Clarity )

Including these is not just for understanding — many San Antonio sellers search terms like “San Antonio short sale process,” “pre foreclosure San Antonio,” “avoid foreclosure TX”, and these help your blog show up where it counts.

Step-by-Step: The Short Sale Process (With San Antonio Focus)

Here’s what you can expect, step by step — and what to watch out for in Bexar County and Texas law.

1. Evaluate Your Situation: Is a Short Sale Right for You?

• You’re underwater (you owe more than the current market value).
• You have a documented hardship (job loss, medical bills, divorce, reduced income).
• You’ve already fallen behind or cannot sustain payments.
• You want to avoid foreclosure and mitigate the damage to credit.

In Texas, short sales are often preferred over foreclosure because of the lesser credit impact and greater control by the homeowner. (Law Offices of Chance M. McGhee)

2. Assemble Your Short Sale Package

This is where many deals stall — you want to be thorough.

Must-have documents typically include:

• A hardship letter (explain why you can’t pay)
• Proof of income (pay stubs, tax returns)
• Bank statements and debts
• Mortgage statements / loan balance(s)
• Authorization for your agent to speak to the lender
• Comparative Market Analysis (CMA) or appraisal estimates
• A sales contract (offer from a buyer)

Lenders want to see that you’ve done your homework. (Silberman Law Firm, PLLC | Texas Lawyers)

3. Contact Your Lender & Submit the Package

You or your agent formally request a short sale. The lender reviews your hardship and finances to decide whether to accept it. (Law Offices of Chance M. McGhee)

Important in Texas / San Antonio:

• Watch timelines — lenders often take 30 to 60+ days to respond. (Redfin)
• Make sure all lienholders (second mortgages, HELOCs) are included if they exist.
• Be proactive — follow up and track your file — delays are common.

4. Market the Home & Accept an Offer

Once approved to list it as a potential short sale (or sometimes before full approval), you list and market the property.

• Your offer must be submitted to the lender.
• The lender may approve, reject, or counter — they have final say. (Redfin)
• Expect negotiation, not just between buyer and seller, but with the bank.

5. Lender Review, Negotiation, & Counteroffers

This is often the most time-consuming stretch.

• The lender will review your short sale offer, supporting docs, and comps.
• They may issue a counteroffer or ask for additional documentation.
• At this stage, many deals collapse if paperwork is incomplete or value is disputed.

6. Closing & Deficiency / Debt Forgiveness

If the lender approves:

• The sale closes like a normal real estate transaction.
• The proceeds go to satisfy the mortgage(s) and closing costs.
• The lender may forgive the deficiency (balance you still owe) or pursue a deficiency judgment depending on terms. (mlgtexas.com)
• Be aware of tax consequences — forgiven debt can sometimes be taxed unless exemptions apply. (Silberman Law Firm, PLLC | Texas Lawyers)

7. After the Short Sale: What Happens Next?

• Credit impact: Less damaging than foreclosure, but there is still a hit.
• Waiting period for new mortgage: You may qualify sooner than after a foreclosure.
• Keep documentation and stay in touch with your lenders.

Common Pitfalls & How You (and I) Can Avoid Them

• Incomplete documentation — missing items often derail approval
• Underpriced offers — lenders reject offers that don’t seem market-justified
• Slow lender processing — constant follow-up is needed
• Multiple liens or junior lienholders not included
• Unexpected deficiency demands or lawsuits

Because of my decades of experience in San Antonio, I know how local lenders — and their negotiators — typically respond. I help sellers strategize pricing, compile stronger short sale packages, and negotiate from a position of knowledge.

Short Sale vs. Foreclosure vs. Pre-Foreclosure: Choosing the Less-Damaging Path

When you’re underwater and under pressure, my job is to steer you toward the path that minimizes harm and preserves options.

Why You Need an Experienced Local Specialist in San Antonio

• Every lender has different policies and appetite for short sale agreements
• San Antonio / Bexar County rules, timing, and local real estate values matter
• Local comps and market knowledge influence lender decisions
• I can anticipate objections, prepare counteroffers, and keep your file moving
• I coordinate with attorneys, title companies, and your other liens seamlessly

If you’re underwater and considering selling, don’t wait until foreclosure starts drowning your credit. A short sale often provides a much better outcome. But it’s not simple — success depends on strong documentation, negotiation skill, timing, and experience.

With two decades of guiding distressed sellers through short sales in San Antonio, I’m ready to help you take control. Let’s find the path forward that protects your credit, minimizes liability, and gives you room to rebuild.

Call to Action

Let’s talk about your situation and map a strategy that makes sense.
 Call me at 210‑772‑3123
 Email me at mark@markstillings.com

I’ll walk you through your options — short sale, pre-foreclosure strategies, or alternatives — and help you move forward with confidence.
Mark Stillings, Associate Broker, M.B.A. – Short Sale Foreclosure Specialist

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