The lender`s objective is to offer a leniency agreement is to improve the chances of obtaining a full payment, or at least a larger amount than it would expect if it imposed the terms of the original credit documents. If the entity is able to determine that the cash flow problem is short-term and there is a significant likelihood that timely payments will be resumed within an acceptable time frame or that the loan will be refinanced and fully paid, the lender will be more likely to consider leniency. The terms of a leniency agreement are negotiated between the borrower and the lender. The possibility of such an agreement depends on the likelihood that the borrower will be able to resume monthly mortgage repayments once the temporary leniency is complete. The lender may authorize a total reduction in the borrower`s payment or only a partial reduction, depending on the size of the borrower`s needs and the lender`s confidence in the borrower`s ability to catch up at a later date. Leniency in a mortgage procedure is a special agreement between the lender and the borrower to delay enforcement. The literal meaning of indulgence is „retained.“ Most lenders and mortgage service providers would rather help borrowers pay off their mortgages than initiate enforcement proceedings. Therefore, when the borrower explains his current financial situation and requires a leniency agreement, most lenders are willing to enter into such an agreement with their customers, adapted to their situation and their ability to pay. For entrepreneurs, a leniency agreement gives them some relief, as it gives them time to solve the business problems that have contributed to their current financial problems. Without this agreement, a bank could appoint a receiver to sell the company`s assets and close the business. But, as with all treaties, an indulgence agreement has conditions and consequences. This is why it is important that business owners understand the ins and outs of an indulgence agreement before signing on the points line.

The first important provision of the law prohibits the lender or mortgage service provider from launching foreclosure proceedings against protected mortgage borrowers before at least June 30, 2020 – Congress is expected to extend the date to a point in the future. Second, the law allows mortgage borrowers to apply for a mortgage loan contract for up to 12 months. To do so, they must contact their lender or mortgage services company and apply for a leniency agreement. If a person does not know which company is bringing their mortgage, they can find out on the website of the Electronic Mortgage Registration System (MERS).