How to write a forbearance agreement

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A loan modification is often the most stable alternative to a foreclosure if you are struggling to keep up with your monthly payments. However, if a loan modification is not an option for you, a forbearance agreement or a repayment plan may be a feasible solution. These arrangements are temporary, in contrast to the permanent solution offered by a loan modification. They may be appropriate when you have not fallen far behind in your payments and expect your financial situation to improve in the near future.

Forbearance Agreements and Repayment Plans

Generate a Mortgage Forbearance Request Letter with This Free Tool | The Truth About Mortgage

Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed to such terms in the Loan Documents as hereinafter defined. Borrower has failed to pay the monthly interest due and owing on the Note for the month of April , and such failure constitutes an Event of Default the " Specified Default " pursuant to Section 3 a i of the Note. As a result of the Specified Default, the indebtedness evidenced by the Loan Documents immediately is due and payable, and Lender has the right, pursuant to the terms of the Loan Documents and applicable law, to collect the indebtedness due to Lender under the Loan Documents and, pursuant to Section 7 of the Security Agreement, to exercise any and all legal rights and remedies available to Lender, having reserved all rights it has at law, in equity, by agreement or otherwise. Borrower has requested that during the Forbearance Period as hereinafter defined , Lender forbear from exercising its rights and remedies against the Borrower with respect to the Specified Default, notwithstanding the existence of the Specified Default in order to negotiate a capital raise. Subject to the tem1s and conditions set forth herein, and without prejudice to anything contained on Section 2 b herein, Lender has agreed to forbear from exercising any default-related rights and remedies against the Borrower for a limited period of time in accordance with this Agreement. NOW, THEREFORE, in consideration of the foregoing, the terms, covenants and conditions contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:. The Recitals, which are true and correct, are incorporated herein by reference.

Forbearance Agreements: Best Practices for Creditors

The lender who agrees to a mortgage forbearance agreement chooses to refrain from exercising a legal right to foreclose on a mortgage. Instead of foreclosure, the lender negotiates different payment arrangements with the borrower. The borrower must continue full payment at the end of the forbearance period. Borrowers may also be required to pay additional amounts to the lender such as the principal, accrued interest, outstanding taxes and insurance.
A forbearance agreement gives you short-term relief to deal with a temporary period of financial hardship. Your mortgage lender agrees, either in advance or after the fact, to accept a period of reduced or suspended monthly payments in return for your agreement to return to full monthly payments and catch up on the missed payments within a certain length of time. You are given this grace period to bring the mortgage current and then return to making just the regular monthly payments.
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