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Foreclosure and Forbearance


Foreclosure – Axsmith Law Blog

Australian Foreclosure Assistance

The Australian government has “compassionate mortgage assistance.”

U.S. Foreclosure Assistance

In the U.S., a number of states at least attempt to assist homeowners in foreclosure. Here are a list of assistances based in DC:  DC Government Website.


Sometimes, the client can do what is called a “workout” or a forbearance.

In the context of a mortgage process, forbearance is a special agreement between the lender and the borrower to delay a foreclosure. The literal meaning of forbearance is “holding back.”

Loan borrowers sometimes have problems making payments. This may cause the lender to start the foreclosure process. To avoid foreclosure, the lender and the borrower can make an agreement called “forbearance”. According to this agreement, the lender delays his right to exercise foreclosure if the borrower can catch up to his payment schedule in a certain time. This period and the payment plan depend on the details of the agreement that are accepted by both parties.

Historically, forbearance has been granted for customers in temporary or short-term financial difficulty. If the borrower has more serious problems, i.e. where the return to full mortgage payments in the long term does not appear sustainable, then forbearance is usually not a solution. It needs to be noted that each lender is likely to have their own suite of forbearance products.  See Wikipedia.

 Renegotiate the Terms of the Mortgage Loan


Foreclosure Notice is Different for USDA Home Loans- Axsmith -Law Blog

A mutual agreement between a lender and borrower to renegotiate terms on a loan that is technically in default, so as to avoid foreclosure or liquidation. The renegotiated terms will generally provide some measure of relief to the borrower in terms of reducing the debt-servicing burden through accommodative measures provided by the lender, such as extending the term of the loan, rescheduling repayments and so on.  See Investopedia.

And, in these processes, you can benefit from invaluable assistance from Uncle Sam


Avoiding Foreclosure – Axsmith Law Blog

Many states give you, by law, the right to reinstate your mortgage (make it current) or redeem the loan (pay off the entire loan). Your state’s page in our Summary of State Foreclosure Laws lists the time limits for the exercise of these procedures if they’re available in your state. Typically, you must exercise them before the foreclosure sale date, although some states give you a period of time after the sales date to redeem the mortgage by paying it off in full (plus interest and costs).

If you think either of these options might work for you, pay attention to the deadlines. For example, if your state gives you only 30 days after you receive the notice of default to reinstate the mortgage, don’t let negotiations drag on past that date, unless reinstatement is clearly not in the cards.

If you do have the financial ability to reinstate the mortgage, you surely can work something out with the servicer in regard to your missed payments, given enough time. If you need a reduced monthly payment, as well as a means to make up missed payments, reinstatement won’t work; instead, you’ll need to redeem the mortgage by refinancing it at a lower interest rate.  See Nolo

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If you are having problems with your mortgage, payments, debt settlement or foreclosure, phone Axsmith Law today at (202) 285-5415.


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