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Mortgage Forbearance Agreement
The assumption of an existing mortgage by a qualified, third-party borrower from a financially distressed borrower. By having someone else assume the mortgage, the financially distressed borrower is relieved of its obligation of repaying the mortgage. The assumption must be approved by the mortgagee.
Foreclosure on a mortgage that is in default is an expensive and timely solution for the lender. If a borrower's financial problems are temporary, a lender might be willing to find a temporary solution, such as a forbearance agreement. If a borrower's financial problems are lasting, a workout assumption is one of several remedies that can help the borrower avoid foreclosure. Other remedies include a mortgage short sale or a deed in lieu of foreclosure.
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