Forbearance Agreements

• Depending on how far behind a homeowner is with the mortgage payments, he can opt to set up a short-term or long-term forbearance agreement. With a short-term forbearance agreement, a homeowner can have his payments suspended for up to three months or pay a reduced mortgage amount for up to six months. After the initial period, the homeowner must pay an amount higher than his mortgage on a monthly basis until the mortgage company recuperates the money not previously paid. Long-term forbearance agreements are for those who have more serious payment delinquencies, and allow a suspension of payments for up to four months, or a reduction of payments for up to 12 months.
  
  

Loan Modification

• A loan modification is the term used when a lender permanently changes the original contract in one or more areas of the mortgage agreement. Changes can include a reduction in the interest rate or an extension in the loan term.
  
  

Partial Reinstatements

• If a homeowner does not pay the mortgage for a short period of time due to an unexpected loss of income that was only short-term, he can call the lending company to setup a partial reinstatement plan. In this plan, the homeowner keeps paying the normal monthly payments and pays off the amount he still owes in installments over the course of an agreed timeframe.
  
  

Partial Claims

• Qualifying homeowners can receive assistance from the Federal Housing Administration. When a homeowner files a partial claim, the FHA pays the mortgage company the outstanding amount the homeowner owes. In return, the homeowner signs a contract that states she will pay the FHA back when she sells the home or completely pays off the mortgage.