The Real Estate Encyclopedia
What Is Recasting?
Category - Mortgage Questions - Mortgage Loans FAQ's

Recasting is known as the process of redesigning existing loans, especially where there is a default.  In this case, the term of the loan could be extended and the interest rate adjusted on a periodic basis, to alleviate the pressure on the borrower.  Avoiding the risk of intervening liens attaining priority over the recast loan becomes critical.  In some cases, the lender may prefer to go along with a delinquent construction loan until the building is sold because a modification and recasting of the loan might jeopardize lien priorities.1 

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