The best way to keep (not sell) a home when a homeowner has a temporary financial hardship is a forbearance plan.
A forbearance plan is an agreement made between a lender and the homeowner where the lender allows the homeowner to miss a couple of payments (or forgives a couple of already missed payments) and then requires the homeowner to make up the payments later – in most cases by making payment-and-a-half payments for several months in a row after the missed payments. The re-payment plan can be structured in several ways.
Advantages and Disadvantages
The advantage of pursuing a forbearance plan is that it can avoid foreclosure and keep a homeowner in a home that they really can afford – if they can just be given time to catch up on their payments.
The disadvantage to a forbearance plan is that most people
are either not eligible for these plans, or those that are,are
not able to ever catch up once the payment-and-a-half payments period begin. They just cannot afford the new or continued payments.
Forbearance plans, if approved, usually delay foreclosure but often don’t permanently prevent it. Before exploring this option, make sure you talk to a real estate professional about all of your options! Regardless of your situation, income, or equity, if you would like to discuss all of your options for selling your home quickly to avoid foreclosure.
Common Questions About Forbearance Plans
Question: Can anyone get a forbearance plan?