Recast Period within Potential Negative Arms

jsimms — Wed, 23 Jul 2008 16:58:26 GMT

Hi - I was looking at an amortization schedule that was calculated by Point whereby the loan had a Adjustment Cap of 7.5%, an Adjustment Period of 12 months, a Recast Period of 60 months, the Max Bal % is blank, and the Recast Stop Period is blank.

Based on my understanding from the definitions within Point, the Recast Stop Period is defined as

"used to specify whether the loan has the ability to be recast again. If the loan cannot be recast again, enter the period in which it will stop. For example, if the loan recasts in 5 years enter 60 months, and if it cannot recast again, enter 60 months in the stop field."

So my question is I've come across a loan file where the Stop Period is Blank. Based on my understanding of the definition above, the Loan should Recast every 60 months as there was no Stop Period entered into the stop field. However, within the Amortization Schedule, the Loan Recasts after the first 60 months and then never recasts again.

Is this correct or have I misunderstood the definition?

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Recast Period within Potential Negative Arms