Loan borrowers sometimes have problems making payments. This may cause the lender to start the foreclosure process. To avoid foreclosure, the lender and the borrower can make an agreement called “forbearance”. According to this agreement, the lender delays his right to exercise foreclosure if the borrower can catch up to his payment schedule in a certain time. This period and the payment plan depend on the details of the agreement that are accepted by both parties.
Forbearance may make sense if you:
- Are facing a short-term financial hardship.
- Think you may fall behind on your mortgage payments, or have already missed one or two payments.
Unemployment is a reality that many homeowners currently face. To provide you with a greater measure of security and more time to find new employment, your lender may be able to provide you with short-term unemployment forbearance (6 months) and, if necessary, extended unemployment forbearance for up to an additional 6 months if you are unemployed.
Unemployment Forbearance may make sense if you:
- Have a loan that is owned by Freddie Mac. Visit Freddie Mac’s Loan Look-up tool to see if they own your loan.
- Are facing financial hardship due to unemployment.
- Are looking for assistance with the mortgage for your primary residence.
If you are unemployed and were or currently are in an existing short-term forbearance plan, you can also be evaluated for an extended unemployment forbearance under this policy.