Mortgage forbearance can be a foreclosure defense option whereby mortgage lenders agree to suspend foreclosure proceedings while a homeowner attempts to bring a defaulted mortgage loan current. Mortgage lenders may even choose to reduce or suspend mortgage payments for an agreed upon length of time. The word “forbearance” is derived from the word “forbear” meaning to withhold. Mortgage forbearances may be a smart foreclosure defense strategy for individuals who know they are experiencing just a temporary financial hardship.
Mortgage Forbearance Can Be a Good Choice When –
A mortgage forbearance may not be a wise move for individuals who know their financial duress can last an extended period of time. It is important for homeowners to understand when to choose this foreclosure defense option.
It can be a good idea to choose a mortgage forbearance when:
- You have been unable to refinance your mortgage loan.
- You are only a few months behind or less on your mortgage payments.
- You are experiencing just a short-term financial hardship and expect to bounce back soon.
Mortgage Forbearance Advantages
A mortgage forbearance may offer a number of advantages when compared with other foreclosure defense strategies. Four advantages associated with a mortgage forbearance can be:
- Homeowners have the opportunity to recover from a financial difficult situation with a suspension or reduction in monthly mortgage payments.
- It may be used in combination with a mortgage modification.
- Homeowners can remain in their houses while foreclosure proceedings are halted with a forbearance.
- There are typically less damaging effects from a forbearance than with a bankruptcy or home foreclosure.
Mortgage Forbearance Requirements
Various mortgage lenders may have different mortgage forbearance requirements. Typically, common forbearance requirements may include:
- A homeowner must have less than 12 months of missed mortgage payments, but at least 3 months of missed mortgage payments.
- A homeowner must have an economic hardship that can be demonstrated to mortgage lenders.
- Homeowners must affirm to mortgage lenders their intent to remain in the home as their primary residence.
Mortgage Forbearance Considerations
A mortgage forbearance is not always the smartest option for all homeowners even though they may qualify. If mortgage payments have recently become unaffordable because of an increase in interest rates on an adjustable rate mortgage, forbearance is not likely to cure this issue. Forbearances are typically reserved for specifically short-term financial difficulties. It can be a good idea to speak with a foreclosure defense attorney prior to pursuing this option.
A foreclosure defense attorney may help homeowners in a number of ways if they are considering mortgage forbearance as a foreclosure defense option. These attorneys can help by reviewing an individual’s financial and foreclosure situation in order to determine if forbearance is the best option. Additionally, these attorneys can negotiate with mortgage lenders and fill out any required paperwork.