Mortgage Forbearance Agreement Template: Deferral/Extension

MORTGAGE FORBEARANCE AGREEMENT TEMPLATE FAQ

What is a mortgage forbearance agreement?

A Mortgage Forbearance Agreement is a written agreement where a lender temporarily allows a borrower to pause, reduce, or delay mortgage payments due to hardship. It also sets out how missed payments will be handled afterward (repayment plan, deferral, or loan term extension).

Does forbearance mean the payments are forgiven?

No. Forbearance generally postpones payments; the borrower usually still owes the missed amounts, plus any interest or escrow changes as allowed by the loan documents and law. This template includes clear options for how the balance is handled.

What are common repayment options after forbearance?

Common options include: (1) repayment plan (pay the arrears over time), (2) deferral (move missed payments to the end of the loan), or (3) extension (extend the maturity date to spread payments). This template includes all three options.

Should escrow, taxes, and insurance be included?

Yes. Escrow can change during hardship periods. This template includes a section for escrow treatment and how shortages or advances will be handled.

Will forbearance affect credit?

It can, depending on lender reporting practices and the type of loan. Borrowers should confirm how their lender will report the arrangement. This template is a general agreement and does not guarantee credit reporting outcomes.

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