Agreement Procedure for Postponing a Trustee Sale in Forbearance
Mortgage lenders may offer loss-mitigation programs to borrowers in foreclosure. A forbearance agreement provides additional time for homeowners to resolve their mortgage default through selling their home or bringing their loan payments current with a mortgage modification or full payment of all amounts due. A mortgage lender may agree to postpone a foreclosure sale for providing forbearance; this typically requires a written forbearance agreement between the mortgage company and homeowners.
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Forbearance Provides a Last Chance
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Homeowners who find a job or sell their homes after a foreclosure sale of their home has been scheduled may qualify for temporary forbearance from their mortgage lenders. Forbearance is a specified period of time during which foreclosure is postponed for allowing homeowners additional time for bringing their mortgage payments current or paying off their mortgage loan through a short sale or traditional sale of their home. Forbearance agreements typically allow a homeowner 30 to 60 days for curing their mortgage default, but forbearance may last longer depending on individual circumstances.
Forbearance Agreement
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Forbearance agreements contain the mortgage loan account number, the names of the mortgage company and mortgage borrowers who are parties to the forbearance agreement, and the effective date and ending date of the forbearance agreement. A forbearance agreement causing postponement of a foreclosure sale also should reference the new sale date if known. Forbearance agreements contingent upon homeowners bringing their mortgage payments current may include an itemized accounting of the amount due, the deadline date for submitting payment, and the name, contact information and location of the mortgage company, trustee, or law firm accepting payment.
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Forbearance for Home Loans in Foreclosure
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Mortgage lenders typically prefer to cure mortgage delinquencies rather than foreclosing on home loans; your lender may be willing to extend appropriate forbearance and postpone a pending foreclosure sale if presented with an offer to purchase your home. The mortgage company and homeowners sign a forbearance agreement indicating the beginning and end of the forbearance period. Mortgage lenders typically issue full payoff statements to escrow companies and law firms handling the closing of the home sale. Short-sale approval letters include the amount required for satisfying the mortgage loan and the deadlines for closing a short sale and remitting payment.
Considerations
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Your mortgage lender is under no obligation to grant forbearance or postpone a foreclosure sale unless you provide proof of filing bankruptcy. Mortgage lenders lose money on most foreclosures and typically prefer to work with homeowners for resolving mortgage loan defaults. In cases where you cannot reach your mortgage lender or loan-servicing company, please contact a United States Department of Housing and Urban Development approved housing counselor for assistance. These counseling services can work between you and your mortgage lender for finding ways to prevent foreclosure. Be proactive in your attempts to save or sell your home. Foreclosure can negatively impact your credit, your ability to find a job, and your ability to rent or buy future housing.
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