In a word, forbearance saves you from foreclosure for a certain amount of time, allowing you more time to pay what is owed. After consulting a loan modification consultant, they will contact your lender in order to request for forbearance. Apart from this, forbearance also has several other meanings and you may consider it if you have a mortgage loan.
A full moratorium on payments
You can ask your loan modification expert for a full moratorium on payments if he/she is capable of doing it. This will give you enough time to arrange the due money or find another way out. If your lender accepts it then getting a full moratorium on your payment would not be hard.
Repayment of a reduced amount
With the help of your loan modification attorney, you can settle for a reduced amount of repayment making an agreement with your lender. Your attorney can arrange a positive-amortizing or a negative-amortizing whichever suits your interest the best. In many cases, paying reduced amount means that the borrower pays only the principal amount borrowed.
Payment of interest
You can avoid a foreclosure by immediately paying the interest. This doesn’t solve the problem but provides you more time to arrange more money. If you have direct contact with your lender then this option would be the most suitable one for you. But you must arrange the remaining due within the time your lender has given you; otherwise, you might get back to the same situation again.
Reduce the loan rate
Sometimes, forbearance allows you to reduce the loan rate depending on the will of the lender. Instead of reducing the loan amount, the lender will charge less interest on it which is basically the same as reducing the loan amount. In this way, you still have to pay the due but a much lesser amount.
Split the loan
There is always the option of splitting the loan. Here, you have to pay a part of the loan within a short period of time and the other part is paid later when you manage the rest of the due amount through selling an asset. This process is also called split mortgage process.