Waterstone Mortgage Corporation

A mortgage recast is a financial option available for conventional loans backed by Fannie Mae or Freddie Mac – which allows borrowers to apply a lump-sum payment toward the principal balance of their mortgage and request a re-amortization of the loan. While the interest rate and maturity date remain unchanged, the monthly principal and interest payment is recalculated based on the reduced unpaid principal balance, resulting in a lower monthly payment.

If I Recast my Mortgage, will my monthly payment remain the same forever?

Recasting your mortgage only affects your monthly principal and interest amount. The payment amount will remain lower, however, if you have an Adjustable Rate Mortgage (ARM) you may see small variances up and down through the rest of your loan term and the Escrow portion of your payment may change in the future, both of which could affect your overall monthly payment.

Is there a minimum limp-sum requirement?

A minimum lump-sum payment of $10,000 is required. The payment can be submitted as:

• A single lump-sum payment, or

• Multiple principal reductions totaling at least $10,000, received within a three-month period, starting from the date the recast request was received

Is there a processing fee?

Yes, a $300 processing fee is required prior to completing a mortgage recast.

Are there specific eligibility requirements to qualify for a recast?

Yes.

•Recasts are available for Fannie Mae and Freddie Mac conventional loans only.
•Recasts are not available for FHA, VA, or USDA loans.
•Some investors may permit only one recast within a 12 month period.
•Recasts are limited to first lien mortgages; second liens are not eligible.
•The account must be current, with no delinquencies or active bankruptcy.
•The loan must not be in an interest only period.
•For Adjustable Rate Mortgages (ARMs), there must be no interest rate change scheduled within the next 30 days.
•All outstanding fees must be paid in full prior to recast approval.
•The loan must not be scheduled for servicing release within the next 15 days.

Why are interest only and adjustable rate mortgages ineligible?

Interest only loans are structured so that the borrower pays only the interest portion for a set period. Since no principal is being paid, there is no amortization to adjust. ARM loans have fluctuating interest rates and payments. If a rate change is set to occur within 30 days, the loan is considered ineligible for recalculating payments as the payment will “recast” with the ARM change automatically.

Which part of my payment will a recast affect?

• The recast affects only the principal and interest portion of your monthly payment.

• Escrow payments (taxes and insurance) remain unchanged.

• If you have an ARM, future rate adjustments may still affect your monthly payment.

• You may be eligible for PMI removal following the recast, subject to appraisal and balance criteria. This is a separate request. Please reach out to our Homeowner Care Team at 855-792-6589 anytime Monday – Friday 8am to 9pm ET or Saturday 8am to 12pm ET with further questions regarding PMI and escrow.

What does the process look like?

To initiate a recast request, please contact our Homeowner Care Team at 855-792-6589 (Monday–Friday 8 AM–9 PM ET, Saturday 8 AM–12 PM ET).

• Your request will be forwarded to the Special Loans team.

• You’ll receive amortization schedules based on your curtailment amount.

• Once the payment and fee are received, a Recast Agreement will be mailed.

• Once the notarized and executed agreement is returned, system updates will be completed, and a new billing statement will be generated to reflect the new payment.

• Please anticipate a 45-90 day processing time depending on documentation and investor cutoffs.

Where do I send my payment?

Please remit your principal reduction and fee either via mail to:

Waterstone Mortgage Corporation
Attn: Special Loans
3138 E Elwood Street
Phoenix, AZ 85034

You may also utilize the following wire instructions to remit the principal reduction and fee:

BANK NAME: Waterstone Mortgage Corporation
BANK ADDRESS: 3201 Orchard Rd. Oswego, IL 60543
BENEFICIARY: Servbank Payment Clearing
ABA ROUTING NUMBER: 071993214
CHECKING ACCOUNT NUMBER: 10000207844
SPECIAL INSTRUCTIONS: Loan Number/Recast