Can You Do a Short Sale While in Forbearance? NJ Guide for 2025

If you’re still in forbearance or just coming out of it, you might be wondering: Can I still do a short sale? The answer is yes—but there’s a process, and timing is everything. Many New Jersey homeowners who entered forbearance during the pandemic now face tough decisions. In this post, we’ll break down how short sale options work during and after forbearance—and how to move forward before foreclosure becomes a real threat.

🏡 What Is a Short Sale and How Does It Work?
Let’s start with the basics: What is a short sale?
A short sale allows you to sell your home for less than what you owe on the mortgage—with your lender’s approval. It’s often a preferred alternative to foreclosure because it can reduce credit damage, eliminate debt, and help you start fresh.

🤔 Can You Do a Short Sale While in Forbearance?
Yes—but here’s the key:
Being in forbearance doesn’t stop you from doing a short sale.
Lenders know many borrowers entered these plans during COVID-19 and that not everyone will recover financially in time.

If you're:

Still behind on payments

Not in a position to reinstate the loan

Facing reduced income or hardship
Then you may qualify for a short sale—even while still in forbearance.

📄 Lender Requirements Still Apply
Being in forbearance doesn’t automatically get you approved. Lenders will still review your:

Hardship: You’ll need to explain why repayment is no longer possible

Property value: The home must be worth less than what’s owed

Assets and income: If you have large savings, the bank may expect a contribution

And just like a regular short sale real estate transaction, you’ll still need a serious buyer, a clean offer, and full documentation.

🕒 Why Timing Is Everything After Forbearance
Once your forbearance plan ends, the clock starts ticking. Missed payments can quickly stack up, and foreclosure proceedings may begin. A short sale is often your best option before things get too far.

That’s why it’s important to:

Speak to a qualified real estate agent early

Get a realistic home valuation

Start preparing your short sale package now

Moving Forward: Don't Wait Until It's Too Late

If you're in forbearance or just came out of it and still can’t keep the home—a short sale can save your credit and your sanity. I've helped dozens of North Jersey families exit gracefully with no foreclosure on record. I’ll guide you through every step and deal directly with the bank on your behalf.

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