Forbearance agreement

"I have let my payments slip behind. My lender has offered a forbearance agreement. What is this, and will I get to keep my house?"

"Forbearance" is a prevention tool that is offered to borrowers that permits an extension of time. It allows the borrower to repay past due payments within a certain period of time. A borrower who is behind in their loan payments should call the lender and explain the situation.

Certain lenders will allow a temporary period with no mortgage payments to borrowers who petition for forbearance

The forbearance period will usually not bring your mortgage current. It will simply allow you a specified period of time that the mortgage lender will not require you to make your required mortgage payments. Usually when you are in a forbearance period with your mortgage company, they will not report any new negative information to the credit bureaus, you will not incur late fees, and no payment(s) will be due during this period of time. Many lenders will do some type of loan modification after the forbearance period is up so that you can get your mortgage back on track.

It is imperative that once you come to a repyment agreement that you meet the payment terms of your agreement. Be sure to get complete contact information for the people that did the agreement. Make sure to get your agreement in writing as well.

A forbearance agreement is usually an agreement between your self and the lender to make up the back payments in order to avoid foreclosure

» DISCLAIMER: The information contained in this article on 'Forbearance agreement' is a collection of contributions by licensed mortgage professionals and is not the opinion of Broker Outpost LLC. Always consult a licensed professional before applying for a mortgage.