What term describes the arrangement where a lender agrees to waive missed payments temporarily?

The term that describes the arrangement where a lender agrees to waive missed payments temporarily is known as forbearance, or moratoriums. In this context, forbearance allows borrowers to pause or reduce their mortgage payments without facing foreclosure, typically for a set period. This arrangement is beneficial for borrowers experiencing temporary financial hardships, such as job loss or medical emergencies, allowing them to stabilize their finances without losing their home immediately.

Forbearance is a proactive solution that can help borrowers to avoid default and manage their debt more effectively during tough times. The lender agrees not to take typical enforcement actions, such as foreclosure, as long as the borrower adheres to the terms of the forbearance agreement.

Other terms like mortgage workout involve negotiating a different payment arrangement, short sale agreements relate to selling the property for less than the mortgage balance, and loan modifications involve changing the terms of the loan permanently. However, none of these options specifically refer to the temporary waiver of missed payments in the same way that forbearance does.