A Forbearance Agreement or Repayment Plan with your bank is the most common solution for avoiding foreclosure. This solution requires that you contact your bank and ask for a Forbearance Agreement. Just because you ask for a Forbearance agreement does not mean that you will receive one. Lenders do not want to create forbearance agreements for borrowers that have on-going financial problems that will not allow them to re-pay delinquent amounts within a reasonable amount of time (6-12 months).
A lender will want you to qualify for a Forbearance Agreement by providing your recent financial documents and an explanation for your delinquency. If you don’t provide an acceptable reason or if you don’t show enough income, you will not qualify for a Forbearance agreement.
Advantages:
- Keep Your Home.
Disadvantages:
- You keep your existing loan, which is bad if you have an ARM.
- Requires that the hardship is temporary.
- You will have higher payments to pay back the delinquent amount.
Related posts:
- Lender Workout Solutions – Repayment Plan
- Lender Workout Solutions – Loan Modification
- Lender Workout Solutions (Blog Series)
- Lender Workout Solutions – Deed-In-Lieu of Foreclosure
- Foreclosure Self Assessment
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