Mortgage debts are difficult enough, but facing the numerous options available to help alleviate the financial stress can prove to be overwhelming. While loan modifications and refinancing are two options that are well known, a lesser known option could be the better solution.
A Hidden Helper
Forbearance agreements are not well known in the mortgage debt industry among consumers. However, they can offer some additional benefits and less risks for many. A forbearance agreement is a plan developed between the borrower and lender, in which the lender agrees to forfeit the right to enter foreclosure on the home while the borrower makes payments to resolve their mortgage debts. Generally, the borrower will make arrangements to repay missed debts and stay consistent with their current payments in exchange for the lender withdrawing their right to foreclose for a specified period of time.
One of the main reasons forbearance agreements are a lesser known solution for mortgage debts is simply that they are not a long term solution. Instead, a forbearance agreement is designed to be a temporary plan that offers relief for a specified period of time. Many borrowers find that their financial hardship may extend beyond the time frame that could be helped by a forbearance agreement, but for those with a temporary lapse in employment or brief medical illness it may be the least invasive solution to resolving mortgage debts.