If you are late on your mortgage payment or if you haven't been able to pay your mortgage for several months in a row, your lender may consider foreclosing on your house. Home foreclosures have been a serious issue in the past several years due to their connection to the housing market collapse, underwater home values, widespread job losses and more.
Your bank may foreclose on you because it wants to cut its losses. It is up to you to prove to your bank that you are a worthwhile candidate for a mortgage and that you simply need time to get back on your feet before you can begin making your mortgage payments in full. If this is the case, you should consider making a mortgage forbearance agreement with your home loan lender.
If you have student loans, you know what forbearance is. Essentially, it lets you postpone making mortgage payments while you deal with a sudden traumatic financial event in your life. A mortgage forbearance agreement is essentially an agreement to put your mortgage on hold, and if you can convince a bank that you are good for the money at a future date with documentation about current or future jobs/prospects, you may be able to stop a pending foreclosure on your home.
Before applying for a mortgage forbearance agreement, contact your loan modification lawyer. He will help you decide if a mortgage forbearance is right for you, if you should apply for a loan modification, or if you should simply leave your house outright.
The requirements for forbearance and modification are very similar. You need to have good credit and strong payment history, you need to show immediate financial need due to pay reduction or sudden funeral, medical or other expense, and you need to contact your bank as soon as possible. The difference between the two is that mortgage forbearance simply puts your current loan terms on hold whereas loan modification changes the terms completely.
Additionally, while there are government programs to help out with loan modification, you will have to come to the forbearance agreement directly with your bank.
You should apply for mortgage forbearance if the financial issue is obviously temporary and you can prove that you will be out of the woods within several months, but you should consider a loan modification if the financial issue is more permanent. With regard to the above question of whether forbearance will stop a pending foreclosure, the answer is that it would be best to apply for forbearance before it gets to that point. If you believe that you can't make an upcoming mortgage payment, contact your loan modification lawyer immediately to agree on a course of action.