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What is Mortgage Loan Forbearance?

 Posted on January 16, 2012 in Mortgage

Mortgage Foreclosure is a complex process that involves many different aspects and elements. Consequently, foreclosure defense is an area of law that encompasses a variety of legal issues. There are several different workout options that banks, lenders and borrowers must be aware of and consider. Sometimes lenders will offer a mortgage loan forbearance to a homeowner who is experiencing a temporary or short-term hardship.

Essentially, a mortgage forbearance is designed to allow a homeowner who has fallen behind on mortgage loan payments to become current on those payments over a condensed period of time. With a forebearance agreement, the lender basically gives the homeowner an extension, typically 6 months, to bring their payments current.

Sometimes the homeowner is charged for the delinquent amount in equal monthly installments over the forbearance period but some lenders will require the borrower pay part or all of the delinquency upfront. In some situations the lender will agree to a temporary suspension or reduction of mortgage payments. If a lender is willing to agree to reduce or suspend mortgage payments, the unpaid payments will be added to the principal of the loan and will be due when the loan matures. Forbearance agreements are negotiated between the lender and the borrower.

If you believe that Mortgage Loan Forbearance would improve your finacial situation or help make your mortgage affordable, please consult an attorney.

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