Loan Modification FAQ
No, a mortgage recast only adjusts the principal and interest. The terms of the loan remain the same.
The recast review process can take up to 30 days. There is no processing fee to review your mortgage recast application.
The following conditions are required for mortgage recast eligibility:
- The loan must be conventional.
- Either Fannie Mae or Freddie Mac must be an investor on the loan, and the investor must allow recast modifications.
- The account cannot have a scheduled service release. If the account does have a scheduled service release, the customer should contact the new investor for recast guidelines.
- The contribution amount must meet or exceed the minimum requirement of 10% of the current account balance.
- The loan may not have had a previous modification.
- The account may not be currently active in bankruptcy.
- The account may not be currently delinquent.
- The loan may not be interest-only. During a loan’s interest-only period, it’s not necessary to request a re-amortization of the account.
- In the case of an Adjustable Rate Mortgage (ARM), there may not be an interest rate change scheduled sooner than 6 months.
Extra payments toward your mortgage loan are “curtailments.” A full mortgage curtailment pays off your mortgage loan completely. A partial curtailment refers to any extra payments you make toward your balance.
As part of a mortgage recast, you should inform ditech in writing the total amount you plan to pay as a curtailment, and the date that these funds will be available. Ditech will review your loan and mail you an estimate letter that includes the estimated principal and interest (P & I) amount.
If you are otherwise eligible, a mortgage recast requires 10% of your current principal balance as the minimum required amount.
Absolutely, your previous servicer will transfer all the information about your loan to us. We won’t make any changes to the structure of the loan. Whether the modification or trial modification was to the interest rate, principal, payment or fees, your modified terms will remain intact.
Your previous servicer will provide us with all the information about your loan, including any relevant loan modification documents you’ve already provided, any pending applications and any trial period plans. We’ll be able to pick up right where your previous servicer left off to get you back on track as quickly as possible.