Mortgage Forbearance Agreement
An agreement made between a mortgage lender and delinquent borrower in which the lender agrees not to exercise its legal right to foreclose on a mortgage and the borrower agrees to a mortgage plan that will, over a certain time period, bring the borrower current on his or her payments. A forbearance agreement is not a long-term solution for delinquent borrowers; it is designed for borrowers who have temporary financial problems caused by unforeseen problems such as temporary unemployment or health problems. Investopedia Says:
Borrowers with more fundamental financial problems - such as having chosen an adjustable rate mortgage on which the interest rate has reset to a level that makes the monthly payments unaffordable - must usually seek remedies other than a forbearance agreement. Related Terms:
Adjustable-Rate Mortgage - ARM
Delinquent Mortgage
Grace Period
Judicial Foreclosure
Loan Modification
Mortgage Originator
Mortgage Short Sale
Payment Shock
Short Refinance
Workout Assumption |