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Foreclosure Articles

Beware Of Mortgage Forbearance In New Jersey

ByJoshua Denbeaux February 9, 2023April 2, 2025

If you are exploring options to help you avoid foreclosure, you’ve likely heard of mortgage forbearance. While a mortgage forbearance may sound quite appealing at first glance, it’s important that you fully understand what they are and how they impact you during foreclosure before you contractually agree to one. 

As a homeowner trying to avoid foreclosure, you should explore all available mortgage modification options to find the right one for your financial future. When considering the ways to protect your home, we recommend consulting a foreclosure attorney. An experienced attorney can help you explore every available option and choose the one best suited for your situation. 

Joshua Denbeaux has been a New Jersey foreclosure attorney for over 15 years and has represented hundreds of homeowners facing foreclosure. Schedule a free consultation today to discuss your options to protect your home from foreclosure. 

What is Mortgage Forbearance in NJ and How Does It Work?

A mortgage forbearance is a short-term mortgage relief agreement between a homeowner and a lender. During a forbearance agreement, mortgage payments are reduced or suspended for a set period of time.

Depending on the factors of your specific agreement, your mortgage forbearance could include a variety of terms. The terms of your forbearance could include some or all of the following:

  • A grace period for mortgage payments
  • Waived or refunded fees
  • No new foreclosures

We often see forbearance get confused with repayment plans or loan modifications. While there are similarities between the three, there are also distinct differences that homeowners should be aware of.

Is a Mortgage Forbearance a Good Idea?

While mortgage forbearance may be a good option for some, it may not be the best for others. Understanding the basics will help you identify if you should pursue forbearance or an alternative solution. Consider these pros and cons before you make any permanent decisions. You can also speak with an experienced foreclosure attorney to help you understand options in your unique situation and which may be best for you. 

Pros of Mortgage Forbearance

There are many benefits of a mortgage forbearance agreement. The main ones are that you are able to avoid foreclosure while maintaining your residence, not having to worry about where you are going through a financial hardship and struggling to get back on your feet. 

Pursuing a mortgage forbearance requires working with your lender, which is why mortgage forbearances are typically viewed as an option to create goodwill with your lender. In choosing to work with your lender to avoid foreclosure, they may be more willing to work with you again in the future, although there is no guarantee they will.

Cons of Mortgage Forbearance

Like many options for avoiding foreclosure, there are a few risks that homeowners should be aware of. One major con is that if the sale of your home is allowed under the terms of your forbearance agreement and you choose to sell your home, your lender can recover missed payments from the sale of your home. This means that your lender could be owed a significant amount of profit from the sale or even that you end up owing them additional payments if the sale doesn’t cover the amount owed.

The repayment of a forbearance could also serve as a reason to choose another option for modifying your mortgage or mortgage payments. There are a variety of options for repayment that your lender may allow you to choose from, including lump sum repayment, a repayment plan, or a mortgage modification. This could mean that at the end of your forbearance, you are left with higher monthly mortgage payments or a large lump sum to repay, which could be equally difficult or completely impossible due to your financial situation.

Ultimately, the decision of whether to pursue mortgage forbearance is up to you and what you think is best for your situation. But you may find peace of mind knowing you have other options to delay or stop foreclosure if the cons of forbearance outweigh the pros for you. If you’re facing foreclosure, one of the easiest ways to figure out what steps you should take next is to consult a foreclosure defense attorney.

Other Resources for Stopping Foreclosure

If you are struggling to make your mortgage payments and are worried about losing your home, but a mortgage forbearance isn’t an option, there may be other ways you can delay or stop foreclosure. Depending on the details of your case, you may be eligible for the following:

  • Loan modification
  • Loss mitigation
  • Repayment plans

For those who are financially able, thye may also have the opportunity to stop foreclosure in its tracks by paying off the sum of your delinquent mortgage payments. We understand this won’t be an option for everyone, which is why we recommend consulting an experienced foreclosure defense attorney. A lawyer may help ensure all potential courses of action are explored based on the resources available for your particular situation.

Foreclosure During Forbearance

If you were actively being foreclosed on before your forbearance, your forbearance agreement should include a clause stating that your foreclosure will be put on hold for the length of the agreement. This means that your bank or lender cannot foreclose on you during the time you’re under forbearance.

Your forbearance might include this clause even if you were not actively being foreclosed on. If you are under forbearance and your lender is pursuing foreclosure, you should contact an attorney immediately, as your homeowner rights are likely being violated. 

​​When Does a Mortgage Forbearance End?

The length of a mortgage forbearance depends on your specific agreement, but they typically last anywhere from three to six months. 

It’s important that you have a plan for how to handle your mortgage once your forbearance does end. Unless your forbearance agreement included waived mortgage fees, you’ll be required to begin paying your mortgage again, plus the amount that wasn’t paid during your forbearance. 

There are a few different ways that you can pay back your fees once your forbearance is over. 

  • Lump-sum payment: repay the total amount at once
  • Repayment plan: you would create a plan with your lender to pay slightly more than your mortgage payment each month until you’ve paid back your missing payments
  • Partial Claim or deferred payments: if you aren’t able to pay more than your mortgage payment each month, all of your missed payments can be added to the end of your loan, and you won’t have to pay the missed payments until the end of your original loan term
  • Loan modification: this is a change to your loan, usually extending the length of your loan term to decrease your monthly payments

Although forbearance, repayment plans, and mortgage modifications have many similarities, they also have distinct differences you should be aware of before you decide which option to pursue. 

Contact a Trusted NJ Foreclosure Attorney Today

Altering your mortgage or entering into any sort of forbearance agreement is a big decision that should not be taken lightly. Before agreeing to a permanent, long-term agreement or alteration, you should strongly consider consulting with a trusted foreclosure attorney. Discussing your situation with an attorney may help ensure you’ve considered every possible avenue and that you are protected in any option that you choose.

You may not have the time, energy, or resources to defend yourself effectively in court, but a reliable attorney may be able to. Joshua Denbeaux has over 15 years of experience representing and defending hundreds of homeowners against foreclosure.  

Schedule a free consultation today to learn more about how Denbeaux may be able to help you find a solution to avoid foreclosure. 

Joshua Denbeaux

Attorney

Joshua Denbeaux is a Partner at Denbeaux & Denbeaux, concentrating his practice on financial consumer rights issues and foreclosure defense. He has substantial experience in legal matters related to foreclosure, loan modification, debt collection, and the prosecution of cases related to predatory lending. Mr. Denbeaux received his law degree in 1994 from Seton Hall University after completing his undergraduate work at The College of Wooster. Mr. Denbeaux is licensed to practice in the United States District Courts for New Jersey.

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