Forbearance is a temporary postponement of mortgage payments. It is a form of repayment relief granted by the lender or creditor in lieu of forcing a property into foreclosure. Loan owners and loan insurers may be willing to negotiate forbearance options because the losses generated by property foreclosure typically fall on them.
KEY TAKEAWAYS
- Forbearance is temporary postponement of mortgage payments granted by the lender or creditor in lieu of forcing a property into foreclosure.
- The terms of a forbearance agreement are negotiated between the borrower and the lender.
- The borrower must demonstrate the cause for repayment postponement, such as financial difficulties associated with a major illness or the loss of a job.
- Fannie Mae is offering assistance for homeowners with a Fannie Mae-owned mortgage who are affected by COVID-19, the illness caused by the new coronavirus.
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