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What is the difference between a Loan Modification and Forbearance?

Posted on: 13th Apr, 2009 03:38 pm


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Hi mtgfixit

Borrowers can apply for loan modification or forbearance when they are delinquent on their mortgage payments. In case of forbearance, the lender will suspend or reduce the borrower's payments for few months depending upon his/her financial situation. If a borrower applies for modification of the loan, then the lender may reduce the interest rates but increase the loan term. Moreover, in case of mortgage modification, the lender may add the past due payments while offering an alternative payment plan.

Thanks.
Posted on: 14th Apr, 2009 02:20 am
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