What is a forbearance agreement?
A forbearance agreement is a temporary arrangement with your lender that pauses or reduces your mortgage payments for a set period while you recover from a financial hardship. It's one of the core loss mitigation tools — and for many homeowners, it's the first lifeline they reach for after a job loss, medical event, or other temporary setback.
Key characteristics:
- Temporary. Unlike a loan modification, forbearance does not change the loan terms permanently. The missed payments must be repaid — so it's a bridge, not a fix.
- Hardship-based. It is designed for a temporary setback — job loss, medical event, natural disaster — where you expect to recover.
- Repayment options vary. Depending on the agreement, the past-due amount may be repaid as a lump sum at the end, spread over a repayment plan, or added to the end of the loan term.
- It stops foreclosure. While an active forbearance is in place, the servicer generally will not advance the foreclosure process.
Forbearance is often the first step toward a longer-term solution. Many homeowners enter forbearance to catch their breath, then transition to a modification once their income stabilizes. The key is to communicate with your servicer before the forbearance ends — if you go silent, you can fall right back into default.
Not sure where to start? Pathway helps homeowners figure out which option fits their situation and what paperwork they'll need. Read our guide to the loss mitigation application and required documents for the full checklist.
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