What is the term for when a lender allows a borrower to miss mortgage payments and add them to the back end of the loan?

The term for when a lender allows a borrower to miss mortgage payments and add them to the back end of the loan is forbearance. This arrangement allows borrowers facing temporary financial difficulties to pause their mortgage payments without the risk of foreclosure. During forbearance, the lender agrees to let the borrower skip or reduce payments for a specified period, after which the borrower resumes regular payments along with any missed amounts added to the total balance of the loan.

Such an approach can provide relief to borrowers during financial hardship, as it helps them avoid immediate foreclosure and gives them time to improve their financial situation. The forbearance agreement might outline the terms including duration, conditions for resuming payments, and how the missed payments will be handled.

The other terms, while related to loan modifications and payment structures, do not refer specifically to the act of allowing missed payments to be added to the loan balance as forbearance does. Recasting typically involves recalculating the monthly payments on the existing loan after making a large payment on the principal, while modification refers to changing the original loan terms. Deferment often relates to a pause in payments on other types of loans but doesn’t specifically indicate the addition of missed payments to the end of a mortgage.