forbearance

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Related to forbearances: deferment

Forbearance

The temporary suspension of loan repayments due to demonstrated financial hardship on the part of the borrower. Interest continues to accrue during forbearance and thus may extend the repayment period or cause payments to increase once they re-commence. A borrower must apply to the lender to be considered for forbearance.

forbearance

The act of restraining from exercising a right.

1. Typically encountered in leases and other contracts specifying that a forbearance by one party who fails to declare a default when entitled shall not entitle the other party to rely on future forbearances and will not constitute a waiver of any rights.

2. After a loan default, lenders will sometimes enter into formal forbearance agreements with borrowers, agreeing not to foreclose if the borrowers will agree to a new payment plan, pay all attorneys' fees associated with drafting the agreement, usually agree to a  higher interest rate and more collateral, and almost always agree to waive any and all claims against the lender.

References in periodicals archive ?
Freddie Mac's forbearance policies give servicers the discretion to suspend a borrower's mortgage payments for up to three months or reduce payments for up to six months.
Under Freddie Mac's requirements servicers must not accrue or collect late charges from the borrower during a short-term forbearance or any subsequent repayment plan period if the borrower is paying according to the forbearance agreement.
Although certain economic indicators have hinted at the start of an economic upturn, Fitch does not expect pressure to ease on deferment and forbearance levels anytime soon.
You should also know that such statements are not guaranties of future performance and are subject to risks, uncertainties and assumptions, including, but not limited to, our ability to negotiate additional forbearances, our ability to maintain compliance with the terms and covenants of our Amended Credit Facility, our ability to consummate any strategic alternatives, our ability to discover reserves that may be extracted on a commercially viable basis, our ability to accurately estimate oil and gas reserves, intense competition, environmental risks and general economic conditions including the price of oil and gas and the global credit crisis.
However, if the Company is unable to obtain forbearances from these creditor groups, or if substantial amounts of the Company's debt are accelerated as a result of a default, the Company may be forced to seek protection under the Bankruptcy Code.
A going-concern risk factor has been included in our public securities filings due to our recurring operating losses, current strain on cash flow, $4,200,000 obligation to our former preferred stockholders and our forbearance agreement with Imperial Bank which expires on December 29, 2000.
The agreement, which is subject to the satisfaction of certain conditions, includes continued forbearance by WorldCom from taking any action to implement WorldCom's notice of intent to disconnect all of NTC's telecommunication services no later than Aug.