Denise borrows $90,000 from Clear Lake Credit Union to buy a home. Denise loses her job and fails to make payments on the mortgage, but assures Clear Lake Credit that she will soon secure a new job. The lender agrees to postpone the payments. This is

Question

Quizplus · Accepted Answer

Forbearance is an agreement between a borrower and a lender to temporarily postpone or reduce mortgage payments due to financial hardship. In this case, Clear Lake Credit Union has agreed to postpone Denise's payments after she lost her job, while she finds a new one. Foreclosure refers to the legal process of a lender taking possession of a property after a borrower defaults on mortgage payments. A reamortization or a restructure refers to the modification of the terms of the loan agreement, such as the interest rate or the loan term, to reduce the borrower's monthly payments or extend the repayment period. Since Clear Lake Credit Union has only agreed to postpone Denise's payments for a short time, and not modify the terms of the loan, the best answer is forbearance.

Denise Borrows $90,000 from Clear Lake Credit Union to Buy