Forbearance is a temporary agreement between a lender and a borrower that allows the borrower to reduce, suspend, or postpone some or all mortgage payments for a limited period when they are experiencing financial hardship. Forbearance does not eliminate the amount owed or forgive the debt. Instead, it provides short-term payment relief while giving the borrower time to recover financially. Interest may continue to accrue during the forbearance period, depending on the terms of the loan and the agreement with the lender.
Forbearance is commonly offered when a borrower faces circumstances such as job loss, illness, natural disasters, or other temporary financial difficulties. At the end of the forbearance period, the borrower is generally required to repay the missed or reduced payments through a repayment plan, a loan modification, a payment deferral, or another arrangement approved by the lender. Borrowers should carefully review the terms of any forbearance agreement so they understand how and when the postponed payments must be repaid and how the arrangement may affect the overall cost of the loan.
