Mortgage forbearance is a temporary relief option that allows homeowners to pause or reduce their mortgage payments for a specific period of time. It is typically offered during times of financial hardship, such as job loss, medical emergencies, or natural disasters.

During a forbearance period, the homeowner is not required to make their regular mortgage payments. This temporary pause in payments can provide much-needed financial relief and help prevent foreclosure.

It's important to note that forbearance is not forgiveness. The missed payments are not eliminated, but rather postponed to a later date. The specific terms of the forbearance agreement will vary depending on the lender and the homeowner's circumstances.

For example, let's say Jane, a homeowner, loses her job and is unable to make her mortgage payments. She contacts her lender and explains her situation. The lender offers her a forbearance plan, allowing her to temporarily pause her mortgage payments for six months. During this forbearance period, Jane's credit score will not be negatively impacted, and she will not face foreclosure.

It's important for homeowners to understand that forbearance is not a long-term solution. At the end of the forbearance period, the missed payments will need to be repaid. The repayment options can vary, depending on the lender and the homeowner's financial situation.

It's recommended that homeowners contact their lenders as soon as they anticipate having difficulty making their mortgage payments. Lenders are often willing to work with homeowners to find a suitable forbearance plan that fits their needs.

References:

• Consumer Financial Protection Bureau - Mortgage Forbearance During COVID-19
• Fannie Mae - COVID-19 Homeowner Assistance Options