The definition of a forbearance is an agreement between the homeowner borrower and the lender to delay a foreclosure.
So what does that mean in today's terms?
To request a forbearance today is to request the lender "hold back" or to allow the homeowner borrower a delay in making the payment. For some borrowers, this may make financial sense if there was a loss in income or job loss, especially if you have a federally backed loan like Fannie Mae or Freddie Mac, which represents about 50% of all home loans. What this means to those borrowers is that the lender and/or servicer will allow the borrower to delay making the payments for a period of time and then will add those missed payments to the back end of the loan.
Unfortunately, for some borrowers who do not have a federally backed loan, the lender and/or servicer may require that homeowner borrower to "catch up" with their payments before making the next payment. So, for example if a borrower received a forbearance for 4 months, they may have to pay the entire 4 month delay before making the next payment whereas a FannieMae or FreddieMac loan may put those payments at the end of the loan.
If you want more information regarding forbearances, if it makes sense for you and/or how it affects you moving forward, let us know. We are here to help!