The term for the waiver of payments that a lender may grant to a borrower facing financial difficulties is known as forbearance or moratoriums. Forbearance refers to an agreement between the lender and borrower where the lender allows the borrower to temporarily stop making payments or to reduce the payment amount for a specified period due to the borrower's financial challenges. This arrangement is intended to provide relief to borrowers who are struggling to meet their payment obligations, without the lender having to initiate foreclosure proceedings or take other drastic actions.
While loan forgiveness implies that the borrower is no longer required to repay part or all of the loan, this is not typically what occurs in forbearance. Deferment agreements involve postponing payments but are not synonymous with the broader concept of forbearance, which also allows for modifications such as reduced payments. Payment restructuring refers to altering the terms of the loan to make payments more manageable, which might occur after forbearance but is not the same as the temporary waiver of payments itself.