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Forbearance Agreements

fcWhat is a Forbearance Agreement?

Forbearance agreements are usually the “first stop” for most mortgage lenders. They may try to entice a borrower with this type of agreement under the guise of  catching up on back payments, interest and fees within a short period of time, often 3-12 months. This results in a larger mortgage payment and may require a lump sum of money to initiate this process. But here’s the rub…

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Forbearance Does Not Stop Foreclosure

Most forbearance agreements do not take the borrower out of foreclosure. This agreement will simply cause the lender to either continue or postpone the foreclosure sale until after the payments are caught up. It’s also good to know that if the borrower is not in exact compliance with the terms of the agreement, the foreclosure sale may take place immediately–often within days of discovery.

Beware!

A forbearance agreement is essentially a legal and agreed to way in which a lender is able to squeeze more money from the borrower. Lenders will often spin the agreement as a payment plan for the loan while continuing or intending to continue with foreclosure anyway. This last grab for money is often not in the best interest of the borrower and most frequently results in property foreclosure.

The fact is that most borrowers would be better served with almost any other type of arrangement othen than a forbearance agreement. There are cases in which a lender may offer a forbearance agreement that’s affordable–but this is the exception, not the rule. A number of California bankruptcy cases that have been filed by our offices have resulted from borrowers entering into forbearance agreements without fully understanding the implications.

Get Help from Someone Who’s on Your Side

If you’re considering a forbearance agreement, receiving proper legal advice is critical. At the Law Offices of Leslie Richards, we are competent with the ins and outs of forbearance agreements and how to guide you on these issues with your best interests in mind. Contact us today for a complimentary consultation to determine the best strategy for you and your situation.

A phone call to Leslie Richards offices will help you determine if you need an attorney or not! Free Phone Consultation click her