What Three Missed Payments Actually Starts in Florida

The New York Fed put out its quarterly household debt report on Tuesday, and the headline on it says delinquencies held steady. One line in the table underneath went the other way. It’s the housing one.

That’s from the Federal Reserve Bank of New York, in the Quarterly Report on Household Debt and Credit for the second quarter of 2026, published August 11.

The One Line That Moved

The Bank tracks something it calls the flow into serious delinquency. That’s the share of balances that newly went at least 90 days late during the quarter, annualized. Read that carefully, because it’s a share of dollars owed. It isn’t a count of people and it isn’t a count of loans.

Mortgage debt went from 1.29 percent a year ago to 1.52 percent now.

Now put that next to everything else in the same table. Home equity lines didn’t move at all, 1.15 percent both years. Credit cards moved four hundredths of a point, 6.93 to 6.97. Auto loans moved seven hundredths, 2.93 to 3.00.

Mortgage moved 0.23 points. That’s the biggest move on the table in the direction nobody wants, and it’s the housing line.

The all-in figure improved, from 2.91 percent to 2.57 percent, and that’s the number the headlines picked up. It improved because of student loans, which dropped from 12.88 percent to 7.83 percent. The New York Fed flags that one itself. Their words: student loan delinquencies “were an exception, with the continued impact of the re-reporting of defaulted student debt causing some distortions.”

So a reporting change on student debt is doing the work in the average. Underneath it, cards and autos and home equity lines barely twitched, and mortgages went up.

Joelle Scally, an Economic Policy Advisor at the Bank, put it this way in the release: “Delinquency rates across most products have held steady over the past two years. Still, new delinquencies for auto loans and credit cards remain at elevated levels, a trend we’ll continue to monitor.”

There is no Florida number anywhere in that report. It’s a national panel built from anonymized credit records, and I’m not going to turn it into a Florida figure it doesn’t contain.

Ninety Days Is the Front of the Pipeline, Not the Back

What I can tell you is what that mark actually starts here, because the sequence in Florida is longer than most people think.

Florida is a judicial foreclosure state. A lender can’t take a house here by handing paperwork to a trustee and posting a notice on the courthouse door. It has to file a lawsuit in circuit court, serve the homeowner, and get a judgment from a judge before a sale date exists at all.

Roughly how it runs. Payments stop. Somewhere in the first few months a breach letter shows up from the servicer with a window to catch up. Under federal servicing rules, a servicer generally can’t make that first foreclosure filing until the loan is more than 120 days delinquent, and there are narrow exceptions to that. Then the case gets filed, and a lis pendens goes on the public record against the property, which is the first piece of it a stranger can see. Then the case runs its course. Then a judgment. Then the clerk sets a sale date.

That’s months. Often more than a year, start to finish.

People get that wrong in both directions, and both hurt. Some assume the house is gone in thirty days and make a decision out of panic. Some assume nothing is happening because nothing has come in the mail, and burn through the part of the timeline where the most doors were open.

The number in the Fed’s table is describing somebody’s spring. The court end of it lands next year.

The Second Number in That Release

Same report, different table, and this is the one that changes the actual work.

Mortgage balances went down last quarter, off $74 billion to $13.117 trillion. Home equity line balances went up, $13 billion in the quarter to $459 billion. That’s $142 billion above the floor they hit in early 2022. Credit limits on those lines rose another $19 billion on top of it.

A home equity line is a second lien. It sits behind the first mortgage on the same house.

Here’s why that matters if a house ever has to sell short. A short sale needs every lien holder to release, and the first lender approving a payoff does not bind the second one. The second lender signs separately, on its own schedule, doing its own math on what it walks away with. On a house that’s already short, there’s usually not much left for it, and it can say no.

So a bigger pool of second liens means more files with two lenders in them instead of one. Two approvals, two timelines, two places for the thing to stall.

Nobody opens a home equity line thinking about any of this, and nothing about having one is a mistake. It’s a normal product used for normal reasons. It just changes what the paperwork looks like later if the numbers stop reaching.

Where I Stop and Somebody Else Starts

Everything above is sale mechanics, and that’s my end of it.

The questions that actually decide something for a person 90 days late are not sale mechanics. Whether a deficiency can follow you after the house is gone is a legal question, and Florida is a recourse state, so how that lands comes down to the judgment and the paperwork. Whether forgiven mortgage debt shows up as taxable income is a tax question, and the exclusion that used to cover a lot of it lapsed at the start of this year. What any of it does to your credit is its own separate thing.

I’m not an attorney and I’m not a CPA. Those three go to the people who are, and they’re worth asking before a decision gets made rather than after.

What I can lay out is how each path behaves inside a real closing. Keep paying and wait it out. Ask the servicer about a modification or a repayment plan. Sell the normal way if the numbers reach. Ask the lender to take less through a short sale if they don’t. Hand the house back through a deed in lieu. Or let it run through the court and deal with what’s on the far side. Each one costs something different, and which one fits is yours to pick.

Whether a lender agrees to any of it is the lender’s call on their own file. I can’t tell you how yours would go.

The Part Worth Keeping

Falling three payments behind isn’t a character problem. It’s usually life landing hard on somebody who was fine a year ago, and that’s a lot of what a table like this one is made of.

The thing that costs people is the timing, not the situation. Early in that sequence there are more options on the table than late in it, and every one of them takes weeks to work through.

I’m in Jacksonville, and distressed property is where most of my week goes. A Florida license doesn’t cross the state line, so if you’re reading this from somewhere else, those questions go out through the SFR referral network to somebody licensed where you are.

Happy to answer a question if one’s useful to you. JimArmstrong904@gmail.com, or (904) 671-4161 if you’d rather talk it through.

Jim Armstrong, REALTOR, Momentum Realty, SFR (Short Sales and Foreclosure Resource) certified. This is general information, not legal, tax, or financial advice.

Momentum Realty is not associated with the government, and our service is not approved by the government or your lender.