Mortgage Servicing and Loan Modifications: 6.2.3 Forbearance Plans
A forbearance plan is an agreement to allow a period of reduced payment or zero payment during which the servicer will “forbear” from initiating foreclosure even though full contractual payments are not being made. Forbearance agreements, which are sometimes oral and sometimes documented in writing, are typically offered to a homeowner experiencing a temporary hardship such as unemployment, short-term disability, or recovering from a natural disaster.