In a mortgage context, what does the term 'forbearance' signify?

In a mortgage context, 'forbearance' refers to the postponement of loan payments. This is a temporary relief option that allows borrowers experiencing financial difficulties to reduce or suspend their monthly mortgage payments without facing immediate penalties such as foreclosure. During forbearance, lenders and borrowers typically agree on a plan where the borrower does not need to make their regular payments for a specified period. This arrangement helps borrowers manage their financial challenges while maintaining homeownership, as they will eventually need to resume payments and may work with the lender to repay any missed amounts at a later time, either by extending the loan term or through a repayment plan.

The other terms do not accurately describe forbearance. Cancellation of the loan implies that the borrower's obligation to repay the mortgage is entirely eliminated. Acceleration of loan payments means that the lender demands immediate full repayment of the remaining balance, often after a default. Foreclosure is the legal process by which lenders take possession of a property when the borrower fails to meet repayment obligations, which is the opposite of what forbearance seeks to prevent.