Put a Stop to Impending Foreclosure – Use a Forbearance Agreement

A lot of people wonder whether a forbearance agreement can help stop a foreclosure. In fact, it is one of the most common questions expert Steve Buzzi deals with. Unfortunately, there is no simple yes or no answer, as it all depends on circumstances.

What Is a Forbearance Agreement?

Simply put, when someone ends up in arrears with a loan such as a mortgage, they can come to a new agreement with their lender. So long as the person sticks to the agreement, the lender will not proceed with a foreclosure process. However, the conditions are very strict and usually only for a very short period of time. Hence, those who are experiencing long term financial difficulties should look for other options.

Should You Start a Forbearance Agreement?

Before you decide to contact Steve Buzzi about a forbearance agreement, you need to do some soul searching and determine just how bad your situation is, and whether you will ever be able to repay your mortgage. Have papers available that explain why you are where you are now, and what you aim to do about it. For instance, providing that you were made redundant but that you have a starting date for a new job in two months’ time, will look much better than you having been made redundant and not having a new job yet.

Banks agree to forbearance agreements because foreclosing costs them a lot of money. However, they are not stupid either. At the end of the day, they want to receive their money, so they can be flexible so long as you demonstrate doing so is financially beneficial to them.

How to Set up a Forbearance Agreement

The best way to set up such an agreement is to contact an expert like Stephen R Buzzi. They know exactly what sort of evidence has to be seen by the bank in order to determine whether or not they will agree to your offer. This will include documents of your incomings and outgoings, proof of having paid your bills on time, a plan of action in terms of how to recuperate, and more.

What Goes in a Forbearance Agreement?

Every agreement is different and is down the whatever was negotiated between you and the lender. Typically, however, it includes:

  • The reduction period, usually no longer than six months.
  • The repayment period, usually at least on year.
  • An agreement that the bank can still foreclose.
  • Details on how much you will pay back each month.
  • Taking part in financial counseling.
  • Selling certain assets.

In return for this, the lender will agree to halt foreclosure proceedings. Remember, however, that they are not reset. Rather, they are paused. Hence, if you don’t still to your end of the deal, nor will they and foreclosure will continue from right where it left off. The most important thing, therefore, is that you are open and honest about any financial issues you may have to your lender, so they can help you to help them.