How do forbearance agreements and programs work?
While each specific lender or banks program terms may vary, the bottom line is that forbearance agreements are plans that are put into place that will allow borrowers the ability to repay a delinquency on their mortgage over time. In most cases, a forbearance will suspend or reduce the monthly payment. A lenders forbearance program may include one or more of the following options for homeowners. • Most will include some type of suspension or reduction of the mortgage payments for a period of time that is sufficient to allow the borrower to recover from the cause of default, and allow the borrower time to get back on their feet. • Some programs will allow for a period of time during which the borrower is only required to make their regular monthly mortgage payment before beginning to repay the arrearage on their loan. • In addition to the two components above, the agreement may also require a repayment period of at least six months on any assistance provided. • Some forbearance agreemen
