Forbearance

(in the context of a mortgage process) – is a special agreement between the lender and the borrower in order to delay a foreclosure. Loan borrowers sometimes have problems with their payments due to unexpected circumstances. This may cause the lender to start the foreclosure process. To avoid this situation, the lender and the borrower have the option to make an agreement called “forbearance”. According to this agreement, the lender delays his/her right to exercise foreclosure if the borrower could catch-up his payment schedule in a designated timeframe (usually 12 months or less). This time-period and the payment plan depend on the details of the agreement which are accepted by both of the parties involved.