Learn what this plan is and how it works to determine if you will benefit from this type of assistance.
There are two types of forbearance plans-one for a temporary hardship and one for a permanent or long-term hardship.
A temporary forbearance provides a temporary reduction or suspension of payments on your mortgage loan, and it is followed by an arrangement to cure any delinquent payments.
This means that you will be asked to make significantly reduced payments for a pre-determined time, or in some cases-no payments at all.
The idea is to allow you to get past a temporary hardship situation, get back on your feet, and resume making your normal payments.
The length of time that your payments will be reduced or waived can be from 6 months to a maximum of 12 months.
A long term or permanent hardship may qualify you for the HomeSaver Forbearance plan.
This program allows for a 6 month reduction of payments to an amount the borrower can afford, but no less than 50% of the regular payments.
So, your monthly mortgage payment could be cut in half for 6 months.
During this period, the lender will work with you to determine the most appropriate long term solution.
This could be a loan modification using the federal plan, Home Affordable Modification.
You may be eligible for a forbearance plan if you are facing imminent default on your mortgage or if you are one or more monthly payments past due.
If you do not currently meet the eligibility requirements for a permanent loan modification, but you have the willingness and ability to make the reduced monthly payments of at least half of your normal contractual mortgage payments.
Since a forbearance plan is a temporary relief from unaffordable payments, you will still need to find a long term solution so that you can stay in your home.
A loan modification is a permanent change to your home loan that will provide you with the affordable payment you need.
Take this time to learn how to apply and qualify for the permanent modification you need and deserve.