What is forbearance?

Forbearance is the term used when the bank agrees to let the borrower stop paying for a set period of time.

Those missed payments, plus interest, must be repaid.

Many banks offer short-term forbearance for homeowners who are experiencing temporary hardship. This must be a hardship with “an end in sight.”

Homeowners who become unemployed are given more leeway and assistance.

As of July 2011, FHA servicers are required to extend the forbearance period for unemployed homeowners from 4 months to 12 months. New FHA regulations have also made it easier for unemployed borrowers to qualify. Borrowers who are turned down for forbearance have 7 days to appeal and / or to produce additional documentation to support the request.

In January 2012, Fannie Mae set forth similar guidelines, which became mandatory for their loan servicers as of March 1, 2012.Freddie Mac has now also extended their forbearance period to 12 months.

During the forbearance period, mortgage payments will be reduced or eliminated. Missed payments must be paid back over time at a later date, generally beginning 6 months after the homeowner has resumed making regular monthly payments.

The good news for homeowners who want or need to sell is that they are allowed to market their homes during the forbearance period. This allows time to find a buyer, negotiate with the lender if the short sale of a home is necessary, and complete the sale without fear of foreclosure.

If you want or need to sell or short sale your house during a forbearance period, talk with San Diego’s short sale specialist, Tom Dunlap.

Call 619-929-1413 or write td@tomdunlap.com. He will be glad to talk with you with no obligation.


Please note that the information provided on this San Diego short sale page is generic, academic information used for general information purposes and may not be construed as or relied upon as a promise for a specific outcome.

This site provides information about real estate, law, income taxes and credit scores as relates to borrowers in distress, short sales and similar situations. The site is designed to help users safely cope with their own needs. Information is not the same as advice — the application of law or regulations to an individual’s specific circumstances. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a lawyer, tax adviser or other specialist if you want professional assurance that our information, and your interpretation of it, is appropriate to your particular situation. The models in photographs accompanying the testimonials on this website are used for illustrative purposes and are not a personal endorsement.