Mortgage Recast 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.
If you are otherwise eligible, a mortgage recast requires 10% of your current principal balance as the minimum required amount.
When you have paid down a significant portion of the principal balance on your mortgage loan, you may consider re-amortizing or recasting the loan. A mortgage recast reduces the mortgage payment without changing the original terms of the loan.
Borrowers whose loans meet specific qualifications may request a re-amortization or mortgage recast review from ditech. Not all mortgage loans are eligible for a mortgage recast. To see whether your loan is eligible, see the FAQ, Am I qualified for a mortgage recast? for the full list of requirements.
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.