Recasting
Barron's Banking Dictionary:
Top
Recasting
Adjustment to a loan or mortgage threatened by default. The loan agreement is modified and the life of the loan may be extended. The major benefit to the borrower is the potential for substantially-reduced loan payments.
Barron's Real Estate Dictionary:
Top
Recasting
The process of adjusting a loan arrangement, especially under the threat of default.
See workout .
Example: Pope owns an apartment building with a mortgage loan requiring debt service of $25,000 per year. Because of a period of high vacancies, Pope’s net operating income falls to $20,000 per year. To eliminate the $5,000 annual negative cash flow , Pope appeals to the lender to recast the loan by extending the maturity and reducing the interest rate for the next 2 years.
See workout .
Example: Pope owns an apartment building with a mortgage loan requiring debt service of $25,000 per year. Because of a period of high vacancies, Pope’s net operating income falls to $20,000 per year. To eliminate the $5,000 annual negative cash flow , Pope appeals to the lender to recast the loan by extending the maturity and reducing the interest rate for the next 2 years.
| Recapture Rate, Recapture Clause | |
| Receiver, Recession |
Post a question - any question - to the WikiAnswers community:
Copyrights:
Barron's Banking Dictionary
Dictionary of Banking Terms. Copyright © 2006 by Barron's Educational Series, Inc. All rights reserved.
Read more
Mentioned in
Recasting a Debt
(business term)
rational reconstruction
(philosophy)
The Worst of Homer & Jethro
(1957 Album by Homer & Jethro)
» More