From: monwel@cbnewsk.cb.att.com (douglas.w.monroe)
Subject: SUMMARY: Re-Casting a mortgage
Organization: AT&T
Distribution: usa
Date: Fri, 4 Sep 1992 15:04:55 GMT
Followup-To: poster
Keywords: re-negotiate terms


Included below is a summary of responses I received to my question
about recasting a mortgage vs. refinancing. As it turns out my
mortgage company will not re-negotiate the loan. They will refigure
the payment schedule if you were to plop down a few grand as a
prepay, but they will not do adjustments to terms of the loan. Too
bad. Many mortgages it seems are sold to various institutions and
may be serviced by the company you send payments to. If this is the
case in your situation, the servicing organization can not
re-negotiate the loan since they don't even hold the papers and it
seems doubtful that they'll forward you to the actual note holder.
Not to discourage anyone, but it's diffinitely worth a call to your
mortgage holder to find out about. Lots a fees can be saved but the
rate is likely to be a bit higher than the refinance rate. In my
case I had to make several calls to find the right person to speak
with sicne evryone up to that point kept saying either they didn't
know what I was trying to do or that they couldn't do what I
wanted. I ended up with the Special Loans Dept. who finally gave me
some good information. This is the Dept. which handles working out
payment schedules in the event you lose your job or something along
those lines.  I hope this helps someone, it sure enlightened me. 
I want to thank everyone who responded with a sincere "Thank you".
**************************************************Doug Monroe******

From: Bill Westfield <billw@cisco.com>

Your existing mortgage holder might renegotiate the interest rate based
on the time you have left on your loan, giving you effectively a (current)
rate on the equivilent of a 23 year mortgage.  This would save you a lot
of interest in the long run, and the bank would keep you as a customer.


From: rrw@elden.cse.nau.edu (Bob Wier)
  Doug - I just sent back a whole bunch of documentation on a re-fianace
  yesterday.  I've found that I don't a LOT less paperwork on this re-finance
  than I did on the original loan with the same company.  Now, they may
  just be requiring less than they did in 1986 (I doubt it, considering
  the economy). Another benefit was that they gave me a coupon for a 
  $250 fee reduction on the re-finance (which cut the application fee
  in half)...

  Incidentally, this is CountryWide Funding, based in California

From: William.J.Twomey@att.com

Any financial advantages?
Yeah, lots.  I wish I could have re-negotiated my mortgage.

Consider, no points, no legal fees, no recording fees, no
taxes, no title search, ad nauseum.  Adds up quickly.

Ask you current mortgagee nicely, "I am going to refinance.
do you want first shot at it, will you rewrite my loan?"

From: Charles Ross Peters <peters@mcnc.org>
Basically, what I think you are talking about is negociating a new interest
rate with your current mortgage company.  Why would they do this you may
ask? The answer is to keep your business.  The rate they might offer will
probably be slightly higher than refinancing with someone else but the
up front costs should be lower.  The idea being that since you are already
a mortgage holder with them you are a known risk (ie. they already have
paperwork on you and your house).

In practice this doesn't happen very often because most financial institiutions
sell their mortgages shortly after they are issued, so they have no vested
interest in keeping you since all they do is service your account anyway.
It seems only the local small town banks and S & Ls actually keep the
mortgages that they issue for any length of time.  The larger institutions
buy and sell mortgages fairly often depending on the needs of the institution.
It's quite likely that your mortgage is "owned" by some other institution
and you aren't even aware of it.

From: btree!hale@UCSD.EDU

I assume that you are looking for what is frequently called a
"mortgage adjustment" where you pay some cash fee to the mortgage
company and they reduce your interest rate (in the case of an
adjustable rate mortgage, both the maximum and minimum rates are
changed as well as the current rate).

The advantage to this is that you don't lose any principal, and
you don't have to jump through hoops to buy your house all over
again.  I think it's a good way to go; unfortunately, our lender
won't do it :(.

Another possible benefit to staying with the same lender: you already
know how they do business.  If their business practices are acceptable
then that could be a big plus.

From: blsouth!klein@gatech.edu (Michael S. Klein)

I don't know what re-casting is, but check with your lender.  Some lenders-

-will reduce the closing costs on a re-finance (mine did it for 2% instead
 of the 2.8 or 3% that is "standard" in Atlanta) to existing customers.
 My refinance happened with no out-of-pocket expense (the closing costs
 and points were rolled into the new amount financed).

-sometimes have a "no-points no-closing costs" mortgage rate (which is
 higher than market rates, but still lowers your payment).

From: bd670@cleveland.Freenet.Edu (Russell I. Dyreng)

The one real advantage to staying with the same mortgage
company is that  soemtimes they can save you a little bit of
money on your up-front fees.  I think that the title search or
title insurance doesn't have to be redone, saving you a little
bit on closing costs.


-- 
                                                          Doug Monroe
                   				       dwm@pruxl.att.com
  						 or   monwel@cbnewsk.att.com