Forbearance explained

By Matt Golski

Not many people know the meaning of the word forbearance, but it might save you from foreclosure if you're on time. If you're currently in a potential foreclosure situation, or you think your lender is considering it, you need to know about forbearance.

A forbearance agreement is a special agreement you make with your lender when you're trying to avoid foreclosure. If you have been met by sudden financial hardship, or you've had problems paying your mortgage because if unsuspected circumstances, a forbearance agreement can help you avoid foreclosure.

When a lender sees bills piling up and debt rising, he is tempted to start the foreclosure process. Before this happens, be sure to talk to your lender about a forbearance agreement. If you agree on a forbearance, the lender delays his right to use foreclosure measures, providing you make a certain amount of payments in certain amount of time. If you offer reasonable payments in a reasonable time, the lender is inclined to say yes.

Forbearance should only be used when your financial problems are of a temporary nature. Of you don't see your financial situation get better anytime soon, forbearance is not for you. If this is your situation, you will be better off by going the mortgage loan modification route.

If you're considering mortgage loan modification, it may be a good idea to ask the help from a good reputable mortgage loan modification company. Not all lenders are happy to help you with the paperwork involved. Also, be aware of the fact that right now a lot of unqualified, money hungry people offer their loan modification services for big upfront payments. If you spot one of those, don't walk away. Run away.

About the Author:

Matt is a professional mortgage advisor. He likes to write about mortgages and financial matters. He writes articles in English about mortgage and finance, and in Dutch about maximale hypotheek and aflossingsvrije hypotheek.