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Foreclosure processMissed payments

Forbearance

Also called Mortgage forbearance

In short

Forbearance is a temporary agreement in which a mortgage servicer lets a borrower pause or reduce payments during a hardship. The skipped amounts must be repaid or resolved later.

Length
Usually a few months, can be extended
Interest
Typically keeps accruing
After it ends
Repayment plan, deferral or mod
Foreclosure
Generally not pursued during it

Where it fits in a foreclosure

Forbearance belongs to the missed payments stage.

  1. 1Missed paymentsThe owner falls behind; the servicer sends notices and may offer workout options.You are here
  2. 2Pre-foreclosureA notice of default or lis pendens is filed. The owner can still sell, catch up or negotiate.
  3. 3AuctionThe property goes to a public sale, usually for cash, as-is and often without an inspection.
  4. 4Bank-owned (REO)If no one outbids the lender, it takes the property back, clears most title issues and lists it.
  5. 5ResaleA buyer or investor purchases, repairs and occupies, rents or resells the home.

How forbearance works

A borrower facing a short-term hardship, such as a job loss, illness or natural disaster, asks the servicer for relief. If approved, payments are paused or reduced for a set period. Forbearance does not forgive the missed payments; it delays them.

What happens when it ends

  • Lump sum: pay all missed amounts at once.
  • Repayment plan: spread the missed amounts over several months on top of the regular payment.
  • Deferral: move missed payments to the end of the loan, due at payoff or sale.
  • Modification: change the loan terms through a loan modification.

Options depend on the loan type and the investor's rules.

Forbearance and foreclosure

Servicers generally do not start or advance foreclosure while a borrower is complying with a forbearance plan. If the hardship continues after forbearance ends and no workout is reached, the loan can fall back into default and move toward pre-foreclosure.

Example

Six months of forbearance

A borrower with a $1,500 monthly payment gets six months of forbearance after a layoff, leaving $9,000 unpaid. When it ends, the borrower is working again and chooses a 12-month repayment plan, paying $1,500 + $750 = $2,250 a month for a year until the $9,000 is caught up.

Forbearance vs. Loan Modification

Forbearance

Forbearance is a temporary agreement in which a mortgage servicer lets a borrower pause or reduce payments during a hardship. The skipped amounts must be repaid or resolved later.

Loan Modification

A loan modification is a permanent change to a mortgage's terms, such as a lower rate, longer term or added past-due amounts, that a lender agrees to so a struggling borrower can afford payments.

The differenceForbearance is a temporary pause or reduction in payments. A loan modification permanently changes the loan's rate, term or balance.

Frequently Asked Questions

Related terms

ReinstatementForeclosure processReinstatement is bringing a defaulted mortgage current by paying all past-due payments, late fees and foreclosure costs in one lump sum, which stops the foreclosure and restores the original loan.Pre-ForeclosureForeclosure processPre-foreclosure is the period after a lender files a default notice or foreclosure lawsuit but before the property is sold at auction. The owner still holds title and can sell or catch up.MortgageMortgages & financingA mortgage is a loan used to buy real estate, secured by the property itself. If the borrower stops paying, the lender can take the property through foreclosure to recover what is owed.Notice of DefaultForeclosure processA notice of default (NOD) is a public notice, recorded with the county, stating that a borrower has fallen behind on a mortgage or deed of trust and that the lender may move toward foreclosure.RefinanceMortgages & financingTo refinance is to replace an existing mortgage with a new one, usually to get a lower rate, change the loan term, or take cash out of the home's equity.Short SaleForeclosure processA short sale is the sale of a home for less than the amount owed on its mortgage, with the lender's approval. The lender agrees to accept the reduced proceeds to avoid a foreclosure.Deed in Lieu of ForeclosureForeclosure processA deed in lieu of foreclosure is an agreement in which a borrower voluntarily transfers ownership of a home to the lender to settle the mortgage and avoid the foreclosure process.PITIMortgages & financingPITI stands for principal, interest, taxes and insurance, the four parts of a typical monthly mortgage payment. Lenders use it to judge whether a borrower can afford a home.

Learn more in the knowledge base

What Is a Pre-Foreclosure? How the Stage Works for BuyersGuide · 7 min readPre-foreclosure is the window between a lender starting foreclosure and the home being sold at auction. The owner still holds title and still has options, so any purchase is a negotiation with the owner rather than a bid or a bank sale. This guide explains how the stage starts, how it ends and how it compares with auctions and bank-owned homes.Approaching Distressed Homeowners Ethically in Pre-ForeclosureGuide · 7 min readHomeowners in pre-foreclosure are under real stress, and they have more options than selling to you. Buyers who are honest, respect those options and follow state rules for distressed-property purchases can make fair deals without exploiting anyone. This guide covers how to do that and which patterns to avoid.How to Buy a Pre-Foreclosure Home: A Step-by-Step GuideGuide · 6 min readBuying a pre-foreclosure means negotiating with an owner who is behind on the mortgage, before the lender sells the home at auction. The deal can close as a normal equity sale or as a short sale that needs the lender's approval. This guide walks through each step, from research to a clean closing through escrow.
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Disclaimer: The information on this page is for general educational purposes only and is not legal, financial, tax or investment advice. Laws, lending rules and market conditions vary by state and change over time, and any figures shown are estimates. Before you buy, sell, finance or bid on a property, consult a qualified attorney, financial advisor, lender or licensed real estate professional about your situation.