What is Forbearance?

Based on your circumstances, you might be able to address missed payments and prevent foreclosure through a Mortgage Forbearance Agreement. This is a deal for a borrower who’s behind on payments, which suspends foreclosure proceedings, and the borrower commits to a repayment plan that gradually brings their mortgage up to date over a set period. Designed as a short-term fix, this agreement supports borrowers facing temporary financial difficulties due to unexpected challenges like medical issues or job loss. Typically, these agreements allow you to pause your monthly mortgage payments for a minimum of 4 months, with some extending up to a full year at the most.

Understanding Mortgage Forbearance

A forbearance agreement is a formal arrangement to address missed payments without immediate risk of foreclosure. Key features include:

• Temporary Payment Relief: Payments may be paused or reduced for a set period, typically ranging from 4 months to a maximum of 12 months.

• Repayment Plan: After the forbearance period, you agree to gradually repay the deferred amount alongside regular payments or through a structured plan.

• Foreclosure Delay: The lender holds off on foreclosure proceedings, giving you time to stabilize your finances.

This approach is intended as a short-term fix, not a permanent solution, and is often suited for borrowers experiencing temporary setbacks rather than ongoing financial strain.

Eligibility Considerations

Forbearance may be an option if you’re facing a temporary hardship, such as:

• Medical Issues: Unexpected health expenses or recovery time impacting your income.

• Job Loss: A sudden employment change or reduction in work hours.

• Other Unforeseen Events: Circumstances like natural disasters or family emergencies.

Lenders typically assess your situation to determine eligibility, focusing on whether you can resume payments and catch up after the forbearance period. Even if you’re currently behind on payments, you may still qualify for this option to help you regain footing.

Benefits of Forbearance

• Immediate Relief: Pause or lower payments to ease financial pressure during a crisis.

• Foreclosure Prevention: Avoid the loss of your home while you work toward recovery.

• Structured Recovery: A clear plan to bring your mortgage current over time.

If you’re struggling to make payments due to a temporary hardship, forbearance could be a critical step to protect your home. Beginning the process sooner rather than later can improve your options. Contact us for a consultation to discuss your circumstances and determine if a forbearance agreement is appropriate for you.