A San Jose bankruptcy attorney discusses how a forbearance agreement works with regard to foreclosure...

A forbearance agreement is a contractual agreement between Borrower and Lender, in which Lender waives its current right to foreclose for a period of time. This agreement is designed to allow Borrowers with short-term financial problems time to catch up on their mortgage payments. Typical reasons for Lenders to enter into such agreements include job loss, medical issues, and other temporary problems. However, Lenders still retain their foreclosure rights if Borrower defaults on their new “forbearance” payment schedules. Forbearance agreements are usually not an option for Borrowers with long-term financial difficulties.

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