Bulletin 2023-052 Recast Requirements
Newrez LLC "Newrez" Approved Correspondent Clients; Newrez is excited to announce that we’ve updated the Newrez Recast process to reflect new lower fees and down payment requirements.
How it Works
A mortgage recast is an alternative option to lower the mortgage payment without a refinance. The process is simple - the customer makes a lump sum payment on the unpaid principal, pays a low service fee, and the lender recalculates the monthly payment based on the lower outstanding principal balance.
A recast only modifies the principal and interest of the payment. The interest rate, maturity date, and escrow portion are not affected. If a customer wants to remove PMI, their request must be made separately from the recast process.
Temporary Buydowns are permitted.
Note: Recast fees are not applicable in all states.
Eligibility
The following loan products are not eligible for a recast:
- Federal Housing Administration (FHA) loans
- Veterans Affairs (VA) loans
- Government National Mortgage Association (GNMA) loans
- Bond loans
- Jumbo loans
Requirements
- The recast fee is $250 and will be subject to state guidelines.
- The fee must be paid upfront.
- The required principal curtailment is a minimum of $5,000.
- The loan must be current.
- Recast may not begin within 60 days of origination.
- Recast must be requested within 60 days of the principal reduction.
- Recast requests are limited to one per 12 consecutive calendar months.
Job Aid