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  What Is Forbearance? The term "forbearance" refers to the temporary postponement of loan payments, typically for a mortgage or student loan. Lenders and other creditors grant forbearance as an alternative to forcing a property into foreclosure or leaving the borrower to default on the loan. The companies that hold loans and their insurers are often willing to negotiate forbearance agreements because the losses caused by foreclosures or defaults typically fall on them. As a result of the COVID-19 pandemic, borrowers have new options for obtaining forbearance, although those are likely to expire in the future. KEY TAKEAWAYS Forbearance is a temporary postponement of loan payments granted by a lender instead of forcing the borrower into foreclosure or default. The terms of a forbearance agreement are negotiated between the borrower and the lender. The borrower must demonstrate the need for postponing payments, such as financial difficulties brought on by a major illness or the

  What Is a Notice of Default? The term notice of default refers to a public notice filed with a court that states that the borrower of a mortgage is in default on a loan. The lender may file a notice of default when a mortgagor falls behind on their mortgage payments. Information on notices of default normally includes the borrower and lender's name and address, the legal address of the property, the nature of the default, as well as other pertinent details. A notice of default is often considered the first step toward foreclosure. KEY TAKEAWAY A notice of default is a public notice filed with a court that states that a mortgagor is in default. It is typically the final action lenders take before activating the lien and seizing the collateral for foreclosure.  The notice must include details such as the borrower and lender's name and address, the property address, and the nature of the default. How Notices of Default Work A notice of default is a serious action taken by a lend

  What Is a Negotiation? A negotiation is a strategic discussion that resolves an issue in a way that both parties find acceptable. In a negotiation, each party tries to persuade the other to agree with his or her point of view. By negotiating, all involved parties try to avoid arguing but agree to reach some form of compromise. Negotiations involve some give and take, which means one party will always come out on top of the negotiation. The other, though, must concede—even if that concession is nominal. Parties involved in negotiations can vary. They can include talks between buyers and sellers, an employer and prospective employee, or governments of two or more countries. KEY TAKEAWAYS A negotiation is a strategic discussion that resolves an issue in a way that both parties find acceptable. Negotiations can take place between buyers and sellers, an employer and prospective employee, or governments of two or more countries. Negotiating is used to reduce debts, lower the sale price of