While working on a loan modification, sometimes the terms just can not be worked out. Maybe the Borrower doesn't have pay stubs or doesn't show enough income to qualify for a fully amortized loan.
In Forebearance, the underlying note remains unchanged but the bank and the Borrower both agree to modified terms to get the Borrower back on track. This is a temporary stop gap approach to the foreclosure issue.
Forebearance keeps the Borrower in their home and it keeps the loan in the Bank's "performing assets" file.
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