Facing Foreclosure in Naples? What a Florida Attorney Wants You to Know

Foreclosure filings across Florida are climbing, and Southwest Florida is feeling it more than most of the state. If you are behind on a mortgage — or you know someone who is — the worst thing you can do is nothing. The second worst is to guess.

This article is drawn from “Foreclosure Client Counseling,” a continuing-education presentation by attorney Sam J. Saad III, of the Law Office of Sam J. Saad III in Naples, delivered to an audience of Florida real estate agents. Saad serves on the Florida Bar / Florida REALTORS® Joint Contract Drafting Committee and is a past chair of the NABOR Legal Resources committee. He was joined by Gary Green, an attorney in his office who handles foreclosure and foreclosure defense, and who walked through the court mechanics quoted below. Where we have added statutory citations, current data, or context beyond the presentation, we have said so and linked the source.

The numbers: Florida is now the worst in the country

Saad opened with the data, and it has only gotten heavier since he presented it.

• Q1 2026: Florida had a foreclosure filing on 1 in every 750 housing units — third-worst in the nation, behind Indiana and South Carolina. Florida recorded 10,099 foreclosure starts, second only to Texas, and 13,683 properties with filings. (ATTOM Q1 2026 Foreclosure Market Report, published April 16, 2026.)
• First half of 2026: Florida moved to worst in the nation, with a filing on 1 in every 373 housing units and 27,494 total filings, up roughly 33% year over year. (ATTOM Midyear 2026 Foreclosure Market Report, July 17, 2026.)
• Cape Coral–Fort Myers posted a foreclosure rate of 1 in every 189 housing units (0.53%) for full-year 2025 — among the highest metro rates in the country — and 0.35% through the first half of 2026. (ATTOM year-end 2025 and midyear 2026 reports.)

Locally, the figures Saad presented tell a two-county story:

• Lee County, October 2025: 226 raw lis pendens filings, of which 143 were mortgage-related. Roughly 8% of mortgaged Lee County homes were estimated to be underwater as of mid-2025.
• Collier County is holding up better — a filing rate of 1 in every 1,045 housing units as of mid-2025 — which Saad attributes largely to how much of this market transacts in cash. Investor purchases ran about 9% in Collier versus 22–30% in Lee. Even so, Collier filings were up about 12% year over year entering 2026.

Lee and Collier county figures above are as presented by Saad, with the as-of dates he stated; state and metro figures are cited to ATTOM directly. Foreclosure data moves monthly — verify current numbers before relying on any of them.

What is driving it, per Saad: insurance premiums and property tax assessments squeezing owners on fixed budgets; condominium assessments and monthly fees rising sharply after the post-Surfside legislative changes; a tourism-sensitive regional economy; and negative equity for people who bought at the 2020–2023 peak — with 2023 buyers in the toughest spot.

What foreclosure actually is in Florida

Florida is a judicial foreclosure state. A lender cannot simply take the house — it has to sue you in circuit court and win. That is slower than most people fear, and it also means there are defined moments where the outcome can still change.

Before the lawsuit. Most mortgages and notes contain an acceleration clause: miss payments, and the entire balance becomes due, not just the missed installments. The lender typically must send a notice of default and acceleration first, demanding the full accelerated balance. Before filing, Green explained, the lender’s counsel pulls a title commitment report to find every other lienholder — second mortgages, HOA liens, judgments, even small county code-enforcement liens. All of them have to be named in the suit. Green described naming Collier County as a party in a recent case over code-enforcement liens that were small in dollar terms but still liens against the property.

After the lawsuit is filed. A process server hands you the summons and complaint, usually in person — at home, at work, at the grocery store — though Florida also permits substitute service and, where a defendant cannot be located after a diligent search, service by publication. From that moment, you have 20 calendar days to respond, under Florida Rule of Civil Procedure 1.140(a). Saad confirmed in the Q&A that these are calendar days, not business days. This is the deadline people blow.

From there, per Green, a foreclosure case most often ends one of five ways:

1. Default — you don’t respond, the court enters a default, and a default judgment of foreclosure follows quickly.
2. Negotiated settlement — available at any stage, before or during the suit.
3. Deed in lieu of foreclosure — you deed the property to the lender; if it accepts, the suit goes away and the attorney’s fees stop accruing.
4. Summary judgment — where most contested foreclosures end. There is usually no genuine dispute that money is owed, so the judge can rule before trial.
5. Trial — comparatively rare, and the longest road. Green: a case that goes to trial can run a year or more.

Attorney’s fees are the sting in the tail. Most notes and mortgages contain a prevailing-party fee provision. As Green put it, the loser pays the winner’s fees. If your case ends in default, summary judgment, or trial, the lender can recover its legal fees from you — and trial-level fees get expensive.

Then the sale. Once judgment is entered, the court sets a judicial sale date and the property is sold at auction (Fla. Stat. § 45.031). Two things can happen with the money:

• Sale brings less than the debt → the lender can seek a deficiency judgment — a money judgment against you personally for the shortfall.
• Sale brings more than the debt → the surplus flows to subordinate lienholders in order of priority, and what remains can go to the former owner. Green’s rule of thumb for priority is that it runs by date: the first lien recorded is first in line. That is the general rule, not a universal one — property taxes, and certain statutory and association liens, don’t necessarily follow it.

On that last point, one piece of supplemental context worth knowing: under Fla. Stat. § 45.032, there is a rebuttable presumption that the owner of record as of the lis pendens filing is entitled to the surplus, after subordinate lienholders who timely filed claims are paid. And there is a hard deadline. A claim has to reach the clerk before the funds are reported as unclaimed, which happens one year after the sale — at which point the money goes to the state’s unclaimed property fund. Surplus funds are also a well-known target for scammers. If someone contacts you offering to recover surplus funds for a fee, slow down and talk to your attorney.

How long does all this take? Green’s honest answer: it depends entirely on where the case resolves. A default is fast. Trial can be a year or more. Summary judgment sits in between. And note the pressure in the other direction — Fla. Stat. § 702.065 requires the court to enter final judgment within 90 days of the close of pleadings in uncontested foreclosures where the lender waives its right to a deficiency. Doing nothing does not buy you time. It accelerates the case.

The seven ways out

Saad’s framework for what is actually on the table. Which of these is available depends on your equity position, your loan type, and how far along the case is.

1. Reinstatement — bring the loan current by paying the arrearage and fees. Available earlier rather than later.
2. Loan modification — change the terms, most commonly by extending the term (30 years to 40, for example). Saad’s caution: getting a lower interest rate is difficult in a rising-rate environment.
3. Forbearance — the lender pauses or reduces payments for a defined period.
4. Refinance — only realistic if you have equity and can qualify.
5. Sell the property — if you are not underwater, sell and pay off the debt. This is the cleanest outcome and the one where an agent adds the most value.
6. Short sale — if you are underwater, the lender agrees to accept less than the balance. Saad has a full seminar on short sales alone on his YouTube channel.
7. Deed in lieu of foreclosure — hand the property back. Saad calls this often the best option, with one critical condition: you negotiate the release of the deficiency as part of the deal. One practical limit worth knowing going in: unlike a foreclosure sale, a deed in lieu does not wipe out junior liens — the lender takes the property subject to them — which is a common reason a lender turns one down.

And the option he calls “the nuclear weapon of foreclosure defense”: bankruptcy. Filing triggers the automatic stay under 11 U.S.C. § 362, which halts the foreclosure. It is not permanent — a lender can ask the bankruptcy court to lift the stay — but it stops the clock while the bankruptcy proceeds. Neither Saad nor Green handles bankruptcy — they refer it out, and they are emphatic that it is its own specialty requiring a bankruptcy attorney.

Some options depend on your loan type, which is stated on the recorded mortgage (available on the Clerk of Court’s website, and also attached to the complaint). FHA loans may offer things like cash-for-keys in a negotiated resolution. VA loans have their own options. Conventional Fannie Mae and Freddie Mac loans have another set. And private mortgages — which Saad’s firm sees a lot of — typically come with less documentation but far more flexibility, because there is an actual human on the other end of the phone.

Why the deficiency conversation has to happen up front

This is the part people underestimate. Saad told the story of a client who deeded a property back to the lender still owing roughly $100,000 — and years later the lender came back looking for the money, having noticed the borrower’s credit had recovered.

That is why he insists on negotiating the deficiency release in writing, at the time of the deal, not afterward. His read on the market: most lenders on Fannie Mae and Freddie Mac products will release the deficiency if the shortfall is not unbearably large — but you have to ask, and get it documented.

Two supplemental points beyond the presentation, both worth raising with your attorney:

• Florida now caps how long a lender has to chase you. Fla. Stat. § 95.11(6)(g) gives a one-year limitations period for a deficiency claim on a one-to-four-family residential property, commencing the day after the clerk issues the certificate of title, or the day after the lender accepts a deed in lieu. That is a meaningfully shorter window than the open-ended exposure many people assume.
• Whether you get a deficiency judgment at all is discretionary. Fla. Stat. § 702.06 places the entry of a deficiency decree “within the sound judicial discretion of the court,” while preserving the lender’s separate right to sue at law.

And then there are IRS liens. Saad’s view: they are their own animal, and they survive foreclosure like other liens. He notes his firm has never had success negotiating with the IRS, that payoffs can be obtained in person through a Fort Myers office if you are in a hurry, and otherwise take a couple of weeks by form. Supplemental context: where a federal tax lien is on the property and the United States is named in the suit, the government has a right to redeem it after the sale — 120 days, or the state-law redemption period if that is longer (28 U.S.C. § 2410(c), which is the provision that governs judicial sales like Florida’s; 26 U.S.C. § 7425 covers nonjudicial sales). That is a wrinkle that can affect a buyer’s willingness to close. Get a title professional involved early.

The tax bill nobody expects

An audience member asked whether the tax forgiveness for short sales had expired. Saad’s answer: yes, it did.

Here is the current state of it, with the citation. The federal exclusion for qualified principal residence indebtedness — the provision that let many homeowners exclude forgiven mortgage debt from taxable income after the last crisis — expired for debt discharged on or after January 1, 2026. It can still reach debt forgiven under a written agreement entered into before that date. Other exclusions, most notably insolvency, may still apply. (IRS Publication 4681; IRS Form 982 instructions.)

Saad’s framing, which is the right one: if you get a waiver of the deficiency, you may still owe income tax on cancellation of indebtedness income — and yes, this reaches primary residences. “That’s just how the government gets you coming and going.”

Talk to a CPA before you sign anything that forgives debt. Real estate professionals cannot advise you on this, and neither this article nor your agent is a substitute for that conversation.

One more Q&A worth repeating, because it comes up constantly in Southwest Florida: a large property tax increase is generally not a hardship that gets you out of foreclosure. Saad’s reasoning is that taxes are a known, foreseeable cost, typically escrowed in the PITI payment. If the increase makes the home genuinely unaffordable, that is a real hardship in the everyday sense — it just is not the kind that changes the legal outcome.

What a real estate agent can — and absolutely cannot — do

Saad devoted a full section of the presentation to this, and the line is sharp.

Step one is not “list the house.” Step one is “call a lawyer.” Once a default notice or a summons arrives, the homeowner is in a legal process. Saad’s guidance to agents is to be what he calls “the source of the source” — get an attorney involved immediately, because there are legal pitfalls from the moment that first notice lands.

Unlicensed practice of law is a felony in Florida. Fla. Stat. § 454.23 makes it a third-degree felony. The line is not between talking and staying silent — it is between explaining how the process works in general terms, which is what this article does, and advising a particular homeowner on their particular options, defenses, or paperwork, which is an attorney’s job. Saad’s version of the safe script: tell them you will help them navigate the process, and that your help is providing people who are experts in their fields.

Three more hard rules from the presentation:

• No upfront fees. A commission earned at closing and shown on the settlement statement is fine. Charging a homeowner a fee in advance to help with a foreclosure is not. Florida enacted Fla. Stat. § 501.1377 precisely because homeowners in foreclosure are targeted by rescue schemes. Saad recalls the Florida Attorney General issuing guidance on advance fees around 2010 or 2011, which is when the practice changed.
• Never take a power of attorney to negotiate for a client in foreclosure. Saad has seen agents do it. Let the attorney handle the legal negotiation; the agent’s job is to facilitate the sale of the real estate.
• Disclose foreclosure status in the MLS. There is a checkbox for it. Use it.

Where an agent genuinely earns their keep is the legwork. Confirming address and ownership. Determining what stage the case is in. Pulling the complaint from the Clerk of Court’s website — it states the amount claimed, which tells you how far underwater the property really is. Identifying the loan type from the recorded mortgage. Searching the official records for additional liens under the borrower’s name. Ordering a CMA, requesting the payoff through title, identifying the arrearage, and from those numbers determining the equity position — which is what decides whether this is an ordinary sale or a short sale.

Then: helping assemble the file the lender will demand — mortgage statements, the complaint, W-2s and tax returns, a hardship letter explaining what happened (job loss, divorce, a death, a medical crisis), and any third-party authorization forms the lender requires so the attorney and agent can speak with them.

And on pricing, Saad is direct: do not be afraid to price aggressively. In an underwater situation the seller is almost certainly netting zero either way — so the objective shifts from squeezing out the last dollar to closing before the court’s sale date and getting the deficiency released. Those are the outcomes that actually change the homeowner’s life.

His last word on the job itself is worth quoting in spirit: in these files, the professionals end up as counselors. Listen to the hardship. Set realistic timelines. Document every call with a follow-up email copying the attorney. And never guarantee an outcome — nobody has all the facts, and the court is not waiting.

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Talk to someone who has worked these files

Are you an agent with a client in foreclosure? If you have a homeowner who needs a foreclosure-experienced listing team — or a Southwest Florida referral outside your market area — we work with agents on standard referral terms and keep you in the loop throughout. See referral partners or get in touch. If your client’s property is outside Florida, we will refer it out to a partner agent rather than guess at a market we don’t know.

Sources & further reading

Primary source: “Foreclosure Client Counseling — For Florida’s Best REALTORS®,” presentation and webinar by attorney Sam J. Saad III, Law Office of Sam J. Saad III (Naples · Marco Island · Bonita/Estero · Fort Myers), with attorney Gary Green on foreclosure litigation mechanics. Contact: (239) 784-5556 · SaadLegal.com. Saad’s own disclaimer applies: the presentation was informational, did not constitute legal advice, and created no attorney-client relationship.

Foreclosure data:

• ATTOM — Q1 and March 2026 U.S. Foreclosure Market Report (published April 16, 2026): Florida 1 in 750 housing units, 10,099 foreclosure starts, 13,683 properties with filings.
• ATTOM Midyear 2026 U.S. Foreclosure Market Report (July 17, 2026), as reported by News4Jax and HousingWire: Florida worst in the nation at 1 in 373 housing units, 27,494 filings; Cape Coral 0.35%.
• ATTOM year-end 2025 report, as reported by Gulfshore Business: Cape Coral 1 in every 189 housing units (0.53%).

Florida law:

• Fla. R. Civ. P. 1.140(a) — 20 days to serve an answer after service of original process.
• Fla. Stat. § 45.031 — judicial sale procedure · § 45.032 — disbursement of surplus funds.
• Fla. Stat. § 702.06 — deficiency decree within the court’s sound discretion · § 702.065 — 90-day final judgment in uncontested cases where deficiency is waived.
• Fla. Stat. § 95.11(6)(g) — one-year limitations period for residential deficiency claims.
• Fla. Stat. § 454.23 — unlicensed practice of law, third-degree felony.
• Fla. Stat. § 501.1377 — violations involving homeowners during residential foreclosure proceedings.

Federal:

• IRS Publication 4681 — canceled debts, foreclosures, repossessions, and abandonments · Form 982 instructions.
• 26 U.S.C. § 7425 and 28 U.S.C. § 2410 — federal tax lien redemption rights following a sale.
• CFPB — what a HUD-approved housing counselor does · HUD — avoiding foreclosure.

Related reading on this site: how home value really works in Naples · how to choose a listing agent · 7 mistakes to avoid when selling · Collier County property taxes · HOA fees in Naples

General education for Southwest Florida homeowners — not legal, tax, or financial advice, and not a substitute for a licensed Florida attorney or CPA. Statutes, rules, and foreclosure data cited here are current as of August 2026 and can change without notice. Figures attributed to the Saad presentation are reproduced as presented, with the as-of dates stated. Deemed reliable but not guaranteed. If you are in foreclosure, consult a Florida foreclosure attorney about your specific situation before acting on anything you read here.