A forbearance is an agreement between the home owner and the lender whereby the lender agrees to a postponement of mortgage payments for a period of time. During this time, payment may be entirely suspended or significantly reduced.
This may be a good solution to avoid foreclosure for those who have lost a job or have a temporary disability.
At the end of the forbearance period, the home owner and lender set up a payment plan for the missed or reduced payments. This may include paying back the missed payments over time or adding them on to the end of the loan period.
Allows the home owner to avoid foreclosure during a short period of hardship.
Suspends foreclosure and allows home owner to have time to catch up on past due payments.
Brings account current during specified period of time.
Your loan is not fully reinstated until you pay the amount you are behind. (Unless it’s added at the end of the loan term.)
A foreclosure is put on hold while you are in forbearance, but not canceled until the payment plan is completed.
If you miss a forbearance payment, you go back to where you were in the foreclosure process.
A forbearance may allow a home owner with a temporary hardship to remain in their home over the long term.