Question:

Forbearance Agreement Definition

Answer:

Forbearance agreement is an agreement on the part of the lender to withhold their right to claim a property whose mortgage is in arrears if the delinquent borrower takes approved steps to bring back mortgage payments on track within specified period of time.

Signing a forbearance agreement is one way to put off foreclosure. It is an arrangement between the borrower and lender that provides a plan to help borrower cope with delinquency. Usually, a lender will agree to forbearance if the borrower is able to make at least 1 mortgage payment and the remaining mortgage payments due are rescheduled and added to expected mortgage payments for the next 24 months.

The amount that the borrower owes accrues interest during a forbearance agreement and the borrower is responsible to pay it along with missing payments.

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Common misspellings: mortage and morgage