*sigh* HLS, I know you are the resident mortgage guru on this forum, but please don't condescend. You're not the only one who knows the exact difference between a payment recast and principal reamortization.

You said, "don't believe that there is a lender on the planet that doesn't credit extra principal monthly…" And you are right. In the CC example I gave earlier, the disclosure is clear. Any payments to principal are credited each time the payment is made. However, the principal amount from which the interest is determined is calculated on the loan's principal balance on annual anniversary date of the loan. 

I point this out because things like this is what makes these loans suck.  I happen to have found this feature in a Chevy Chase loan I am helping a distressed homeowner modify.  Believe me, I have learned more about mortgage loan details in the past 6 months than I care to know about for the rest of my life.  It's the bad information that no one tells you about that is the danger these days.