Forbearance Waterfall Calculator

After a forbearance period, deferred payments must be handled. This calculator models three waterfall options: lump sum, repayment plan, or loan modification.

Monthly P+I payment

Forbearance months

Proposed payback months

Mod interest rate

Current note rate

Lump sum due at end

$13,200

Monthly during repayment plan

$2,750

Monthly savings under mod

$338

How the math works

Post-forbearance waterfall: lump sum → repayment plan → modification → deed-in-lieu → short sale → foreclosure. Each step progressively painful.

Lenders prefer getting paid (even slowly) over taking the asset. Borrowers should propose a realistic repayment plan up front; weak plans trigger escalation.

How to Use

Enter monthly P+I payment.
Enter forbearance months.
Enter proposed payback months.
Enter loan mod rate (optional).
Compare lump-sum vs plan vs mod paths.

Frequently Asked Questions

What happens during forbearance?

Borrower doesn't pay (or pays partial). Missed payments accrue. Interest often capitalizes. Forbearance ends; missed payments come due.

Which option is cheapest?

Depends on borrower cash. Lump sum cheapest mathematically (no new interest). Repayment plan adds interest + higher monthly. Mod lowers monthly but extends term.

Is forbearance a workout?

Yes — it's a pre-workout accommodation. Post-forbearance, if borrower can't pay, lender moves to formal workout: modification, deed-in-lieu, short sale, or foreclosure.

When does a lender negotiate vs foreclose?

Lenders calculate their net recovery from foreclosure (asset value minus legal, time, and sale costs) and compare to any workout proposal. If your offer nets the lender more than foreclosure, and you present it with clear sources of capital, most lenders will engage. Bring a credible sponsor, documented sources, and a timeline — vague asks get declined. Build the relationship before distress, not after.