Forbearance

What it means

A temporary agreement between a borrower and a lender to pause or reduce required payments for a set period during a hardship — job loss, illness, natural disaster, or another covered reason. Forbearance is not loan forgiveness. The missed payments are added back at the end of the forbearance period, either as a lump sum, spread over the remaining term, added to the end of the loan, or rolled into a loan modification. Most home mortgages allow forbearance under federal RESPA loss-mitigation rules. Federal student loans allow general forbearance and several special forbearances tied to military service, internship, and other categories. The borrower applies through the loan servicer. Granting forbearance is usually discretionary, but some federally backed loans during emergencies have mandatory forbearance options. Free legal help with mortgage forbearance and modification is available through Empire Justice Center and Legal Aid Society of Rochester.

When you might hear this

Forbearance is a temporary agreement with a lender to pause or reduce mortgage or student-loan payments during a hardship. It is not loan forgiveness — the missed amounts are added back later, all at once or spread out over a repayment plan.

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