Avoiding Foreclosure through Forbearance

Jessica
Author:
Community Mentor
Rate This Article:
(Rated 5 by 5004 viewers)



Forbearance is a temporary agreement under which a mortgage lender can either reduce or suspend monthly installments paid by the borrower. Usually forbearance continues for a period of less than 6 months, but it can last for some more time depending upon the lender.

Through forbearance on mortgage, borrowers get the chance to avoid foreclosure - a legal process by which the lender can sell off the property and recover the outstanding loan balance.

But forbearance is not allowed to each and every borrower. Generally, those having recently lost their sources of income and going through financial problems are allowed to go through forbearance. Lenders consider such an approach only if the borrower can convince them that the problem is temporary. The borrower should also have relevant proofs stating that he is capable of qualifying for the reduced payment plan.

At the end of the forbearance agreement, the borrower has to make regular payments along with an extra amount that will make up for the loss on account of non-payment or reduced payments. Usually the repayment period does not exceed a year.

Forbearance does not imply that the lender has forgiven the debt; rather it allows a borrower to get along with the loan payments that he owes within a later date.Last updated on January 16, 2013

Latest Community Discussions
have a 3 month forbearance agreement. will filing a chapter7 after the agreement is completed stop the modification process?

posted on 2013-03-25 17:52:53
I am joining this group because my situation is very similar to some of those listed above. In 2009 I lost my job and in the fall of th...

posted on 2012-07-13 16:08:16
We have been trying for a loan modification with Wachovia for several months now. We are NOT in default and have excellent credit and n...

posted on 2011-09-17 08:49:37
We entered into a Forbearance Agreement with Chase. We made all of our payments on time. There has been no attempt by Chase to collect ...

posted on 2010-12-02 07:44:21
how do i get a mortgage forbearance

posted on 2010-11-30 15:41:28





Ask question to Author
Subject
Image Verification


Can't read the image? click here to refresh
Message body
Author Message
kathe arbogast

Guest






0.10 Dollars($)

Post     Post subject: mortgage forbearance

What are good terms to accept a forbearance agreement?
image
Mini Profile  jameshogg
jameshogg



Joined: 20 Dec 2005
Posts: 12157
Location: Nevada

1221.05 Dollars($)

Post     Post subject:

Hi kathie,

Welcome to forums.

I've already replied to your query at http://www.mortgagefit.com/loantalk/forbearance.html . Please have a look at it.
image
Cathy

Guest






0.10 Dollars($)

Post     Post subject: Forbearance

I'm currently unemployed and am considering Forbearance initially for 4 months with 0 payments. At the end of the 4 months and I have a job, will my house payment be higher than the original amount - which I don't think I can't afford, or will the bank modify the loan so I can afford it?

Thank you,

Cathy
image
Mini Profile  Niicss
Niicss



Joined: 03 Oct 2005
Posts: 5499
Location: New Jersey

601.94 Dollars($)

Post     Post subject:

Hi Cathy,

After the forbearance period is over, you payments will definitely increase. In my opinion, you should apply for a loan modification right now if you are delinquent on your payments.

Thanks.
image
Katherine

Guest






0.10 Dollars($)

Post     Post subject: FORBEARANCE

Is it true that the payments you are making under the forbearance agreement do not get applied to your mortgage? That Forbearance is only a way to "hold them back from filing foreclosure" but that the original owed amount is tacked on to the end of the mortage?
image
Mini Profile  smithsussane
smith.sussane



Joined: 18 Sep 2008
Posts: 12591
Location: Alaska

1308.69 Dollars($)

Post     Post subject:

Hi Katherine!

Welcome to forums!

In a forbearance, the lender either reduces or suspends the payments for few months. The reduced balance that you pay to the lender goes towards your mortgage. Once the forbearance period is over, you will have to pay certain extra amount along with your regular payments in order to bring your mortgage current.

Feel free to ask if you have further queries.

Sussane
image
Notary973

Guest






0.10 Dollars($)

Post     Post subject: Forbearance & credit

Does mortgage forbearance negatively affect your credit?
image
Mini Profile  jerry
jerry
Moderator


Joined: 17 Oct 2005
Posts: 3249
Location: MICHIGAN

510.68 Dollars($)

Post     Post subject:

Hi Notary,

A forbearance allows you the opportunity to prevent the loan from being reported as delinquent and catch up with the loan payments. Thus, it actually helps you to avoid negative items on your credit report. When your lender agrees to do a forbearance, they do not generally report it as a negative item which is why it does not affect your credit negatively.

Thanks,

Jerry
image
Jamie

Guest






0.10 Dollars($)

Post     Post subject: Forbearance

Hello. I am currently in a 3 month forbearance and they say that they are going to try and leave the payments the same. Not sure for how long, but I would like for it to be long enough to sell the house. So my question is...I have paperwork to fill out about finances(I can't remember what I first reported). So I know after reporting eveything it will show that we should have a little extra money. For them to approve the payments to remain the same is it ok to show extra income or to show it as that we have no extra?
image
Mini Profile  jenkin7
jenkin7



Joined: 04 Jun 2007
Posts: 4537
Location: Hawaii

728.42 Dollars($)

Post     Post subject:

Hi Jamie,

The lender will approve the forbearance if they are convinced that your various sources of future income will help you be current on the loan or assist you in qualifying for a repayment plan or a loan modification at the end of the forbearance period. Thus, I believe you need to show a little bit of extra income so the lender knows that you will catch up with the payments once the forbearance period is over. But you should also not show too much of extra income as the lender can reject the forbearance thinking you can afford your current monthly payments.
image
ivy Jones

Guest






0.10 Dollars($)

Post     Post subject: repayment on mortgage during forbearance

I am currently on a forebearance contract until August. At the end of my forbearance, am I required to pay for the the three months that I am delinquent plus resume my monthly mortgage?
image
wilbur

Guest






0.10 Dollars($)

Post     Post subject: mortage

my wife lost her job a little over a year ago, im disabled and receive workers comp and soc sec and we are almost 3 months behind on our mortage payment and we are doing a loan modification now. do we still try to make some kind of payment or will they let us do a forbearance so we can lower it for right now
image
Mini Profile  sunnyca2009




Joined: 04 Aug 2009
Posts: 1731


35.55 Dollars($)

Post     Post subject:

If you want to protect your credit report you want to make payment on time

Also its a good idea to to check with the lender and see what they are expectign during this time
image
fk21

Guest






0.10 Dollars($)

Post     Post subject:

Hello, I have been approved for forbearance, and my Mortgage company has me scheduled to pay the next 2 month at normal payment, then it jumps up almost 300 dollars extra a month until Oct. of 2010, this would put my family in a worse situation than before and I am quite concerned. Any advice as to if this is usual? From reading other sites I was under the impression that this would help me... thanks in advance
image

1, 2  Next  
Page 1 of 2

 

Page loaded in 1.163 seconds.