What is Forbearance?

One of the ways to avoid foreclosure is to enter into forbearance.

If you agree to enter into forbearance, you will have to pay larger monthly payments in order to make up for the payments you missed. A typical payment under forbearance would be one and a half times the former monthly mortgage.

You will also have to make a large payment at the onset of the forbearance agreement. It is a down payment of sorts, a way of showing the lender that you are committed to keeping the property.

Forbearance does not last forever. It is a way for you to get caught up on payments and reassure the lender that the loan will be paid off. Usually, a lender will require that you make up for missing payments within 12-18 months.

For some who are already having trouble making payments, this method may not be a solution, but it has worked in certain situations. If you ran into some financial trouble, but have managed to pull yourself out of it, then forbearance may allow you to avoid foreclosure and stay in your home.