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[b:04c0ef9dfb]Forbearance[/b:04c0ef9dfb] 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 [b:04c0ef9dfb]foreclosure[/b:04c0ef9dfb] - 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.

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi maryann,

The late payments are normally added back to the principal amount which increases the payments when the repayment option is given at the time of loan modification. If you can't afford the payments, you can think of selling off the property in order to get rid of it. You can go for the option of deed in lieu of foreclosure to get rid of the property.

Thanks.

Like | Dislike | Share | Posted: Mon, 07/09/2012 - 01:10 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

My Freddy Mac loan servicer offered me several mortgage forbearance terms, and then demanded full payment of the (9 month arrears). They also reported to the three credit reporting agencies that we were in arrears while we were in the forbearance period. Apparently, the work-out department works indepently of the foreclosure department, and both process were in the works, concurrently. We stopped the foreclosure and obtained a modification after hiring an attorney, but our credit has been destroyed by this process. The final outcome was that the bank tacked our arrears on to the end of our principal amount, increasing our monthly payment by $250! We can now no longer qualify for a loan.

Like | Dislike | Share | Posted: Fri, 07/06/2012 - 22:59 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

What are good terms to accept a forbearance agreement?

Like | Dislike | Share | Posted: Wed, 03/19/2008 - 11:52 | Post subject:

jameshogg's picture
jameshogg | Joined: December 20, 2005 02:58 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

Like | Dislike | Share | Posted: Wed, 03/19/2008 - 23:44 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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

Like | Dislike | Share | Posted: Wed, 02/11/2009 - 04:08 | Post subject:

Niicss's picture
Niicss | Joined: October 3, 2005 11:54 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

Like | Dislike | Share | Posted: Fri, 02/13/2009 - 03:51 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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?

Like | Dislike | Share | Posted: Fri, 03/06/2009 - 11:42 | Post subject:

smith.sussane's picture
smith.sussane | Joined: September 18, 2008 09:57 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

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

Like | Dislike | Share | Posted: Sun, 03/08/2009 - 22:34 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Does mortgage forbearance negatively affect your credit?

Like | Dislike | Share | Posted: Thu, 05/07/2009 - 11:48 | Post subject:

jerry's picture
jerry | Joined: October 17, 2005 03:24 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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

Like | Dislike | Share | Posted: Fri, 05/08/2009 - 06:08 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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?

Like | Dislike | Share | Posted: Mon, 05/25/2009 - 00:07 | Post subject:

jenkin7's picture
jenkin7 | Joined: June 4, 2007 11:02 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

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.

Like | Dislike | Share | Posted: Tue, 05/26/2009 - 01:54 | Post subject:

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

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?

Like | Dislike | Share | Posted: Fri, 05/29/2009 - 20:11 | Post subject:

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