Avoiding Foreclosure through Forbearance

Sam

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, 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.

Guest

What are good terms to accept?

jameshogg · Posted: Wed Mar 19, 2008 11:44 pm 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.

Guest

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

Niicss · Posted: Fri Feb 13, 2009 4:51 am 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.

Guest

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?

smithsussane · Posted: Sun Mar 08, 2009 10:34 pm 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

Guest

Does mortgage forbearance negatively affect your credit?

jerry · Posted: Fri May 08, 2009 6:08 am 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

Guest

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?

jenkin7 · Posted: Tue May 26, 2009 1:54 am 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.

Guest

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?

Guest

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

sunnyca2009 · Joined: 04 Aug 2009 Posts: 1737 36.13 Dollars($)

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

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