A forbearance agreement is an agreement whereby a lender agrees to restrain from exercising their right to foreclose on a property, and in exchange the borrower agrees to commit to a payment plan that will solve the delinquency.
While lender go to great lengths not to go this route, sometimes it is the best solution when a borrower in default is experiencing a short term cash flow problem.
As long as the borrower fulfills the promise of adhering the a special payment plan in the forbearance agreement, everything will revert back to normal eventually.
This helps both parties avoid going through with foreclosure.
The lender maintains a good relationship with the borrower while getting paid, and the borrower keeps his home.