A forbearance plan in Texas is an agreement made between a lender and the homeowner where the lender allows the homeowner to miss a few payments (or forgives a couple of already missed payments) and then requires the homeowner to make up the payments later – in most cases by making payment-and-a-half payments for several months in a row after the missed payments. The re-payment (Forbearance Plans) can be structured in several ways.
The best way to keep a House when a homeowner has a temporary financial hardship are forbearance plans.
For more legal information about avoiding foreclosure with a forbearance visit Law Summary of Foreclosure in Texas.
Advantages and Disadvantages
The advantage of pursuing a forbearance plan is that it can avoid foreclosure and keep a homeowner in a home that they really can afford – if they can just be given time to catch up on their payments.
The disadvantage to a forbearance plan is that most people are either not eligible for these plans, or those that are,are not able to ever catch up once the payment-and-a-half payments period begin. They just cannot afford the new or continued payments.
Forbearance plans, if approved, delays foreclosure but often doesn’t prevent it. Before exploring this option, make sure you talk to a real estate professional about all of your options! Regardless of your situation, income, or equity.
Remember that Forbearance Plans, is an alternative for you to keep your house. However, If you decide to sell your house as-is is a better option, we can make you a fair offer with our 5 steps process to buy a house, so you can start over fresh, and when possible, with money in your pocket.
Common Questions About Forbearance Plans
Question: Can anyone get a forbearance plan?
Answer: No, in most cases the lender will have to review each homeowner’s individual circumstance to see if they are eligible. If you miss payments causing a hardship due to a temporary situation (such as temporary job loss that is now over), then you are more likely to be eligible and the program probably makes sense. If, however, your financial hardship is on-going (such as a loss of income that has not been replaced), a forbearance plan probably won’t be approved, and won’t do any good anyway. In these situations, other selling options are often better.