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what's the difference between a forbearance agreement a repayment plan and a loan modification in a forbearance agreement the loan owner or the lender will agree to reduce or suspend your payment's for its set amount of time with a repayment plan the lender temporarily increases your monthly payment by adding part of the overdue amount to your current payments so that you can get caught up on the loan in a modification the lender typically lowers your monthly payment and brings the loan up to date by adding any pass-through amounts to the balance of your debt while a loan modification is a permanent solution to unaffordable monthly payments a forbearance agreement provides a short-term relief for the borrower with a forbearance the lender agrees to reduce or suspend mortgage payments for a while during the forbearance period the servicer on behalf of a lender will not initiate a foreclosure in exchange however the borrower must resume making the full payment at the end of the forbearance period and typically get current on the missed payments which will include principal interest taxes and insurance you can accomplish this by either paying the amount as a lump sum adding an extra amount to your regular payments each month until the entire skipped amount is repaid or complete a loan modification in which the lender will add the unpaid amount to the balance of the loan or the back of the loan now if you missed some of your mortgage payments due to a temporary hardship a repayment plan might provide a way to catch up once your finances are back in order a repayment plan is an agreement to repay the delinquent amounts over a period of time and typically this works like this the lender will spread your overdue amount over a certain number of months during the repayment period a portion of the overdue amount is added to each of your regular mortgage payments and at the end of the repayment period you'll be current on your mortgage payments and expect to resume paying your normal monthly payment that point onward the length of the repayment plan does vary it'll mainly depend on how much you can afford to pay each month however I've seen a three to six-month repayment period B typically what's done a loan modification it's a permanent restructuring of a loan where one or more of the terms of the loan are actually changed in order to provide a more affordable payment to the borrower if you're currently unable to afford your mortgage payment due to a change in circumstances but you could make a modified payment going forward a loan modification might help you avoid a foreclosure now which of the terms of the original loan can lender agree to change will believe it or not the lender might agree to reduce your interest rate might agree to convert a variable interest rate to a fixed interest rate or even extend the length of the original loan term or for bare some of the principal balance and forbearance simply preparing the principal means simply setting aside a portion of the total debt to be paid usually when the home is either refinanced sold or when the loan matures generally to get a loan modification you're gonna have to provide all the required documentation to the servicer in order for them to evaluate your situation and the paperwork typically includes a financial statement proof of income most recent tax returns bank statements and a hardship letter showing that you cannot make your current mortgage payment due to a financial hardship lastly you will be expected to complete a trial period to demonstrate you can actually afford the new lower monthly amount there are different there are actually many different kinds of loan modification programs out there some of which include your lenders own in-house loan modification program as well as Fannie Mae and Freddie Mac flex modifications and there are other special modification programs also available for certain kinds of loans like the FHA insured loan and DV and VA loans if you want to find out more about how a loan modification can help stop the foreclosure process on your home visit we help stop foreclosure com there you'll be asked simple to answer questions which will help us provide you with the information to eliminate the worry and stress associated with a foreclosure process and to help you save your credit and the equity in your home if you have received a notice of default from the bank time is critical a list pendants or notice of default means the bank has started the process of foreclosure and unless action is taken to stop them they will proceed with a foreclosure so please visit we help stop foreclosure calm