BEWARE of forbearance agreements! We mention this "option" for avoiding foreclosure first, because the lender will often present it as an alternative to stop foreclosure sale.

In fact if you have real financial problems, a forbearance agreement is little more than a way to postpone foreclosure. It is often promoted as a chance to catch up on your payments — but with stricter terms.

The lender often requires a huge lump sum (which you may not have) before they will agree to stop mortgage foreclosure. Then if you miss any subsequent payments, the terms of the agreement usually permit more immediate action, making it harder for you to stop foreclosure. In California, this is just a way to squeeze more money out of a homeowner, under the guise of a workout plan. Very rarely is it a viable option for the borrower.