I agree recasting won't save you any interest. If you've already paid a portion of your principal down it can reduce your monthly payment, but the interest will be the same overall if you keep the same payment schedule. If you lower your monthly payment (and don't pay extra each month) you will actually end up paying more interest.
For example you take a $100,000 mortgage and have a payment of $800/mo, and you immediately pay $50,000 off the principal, your next payment will still be $800, but more of it will go towards principal now and you will pay it off way ahead of schedule. If you recast it will lower the monthly payment by re amortizing over 30 years.
If you take out a $100k loan... then pay off $50k right away and recast, it'd be the same as you just getting a $50k loan in the first place, and obviously you'll pay less total interest on a 50k loan than a $100k loan... exactly half as much in fact.
I'm not saying recasting is a good idea (mostly due to fees), but it does save on interest.
I think you are wrong. Interest is a function of the APR and the principal you owe and that is it. A 100k loan that is paid to 50k immediately will still have scheduled payments calculated at the 100k principal (you are only getting charged interest on what you actually owe though).
Some real numbers: 100k loan, 5% APR
mortgage: $536.82/mo for 360 months (30 years)
If you pay an extra 50k on the first payment, all subsequent payments will still be $536.82 (though more of it will go towards principal since you paid the principal down some). That means you will have the mortgage paid off on payment #119 (just under 10 years) with a total interest of $13,752.53 paid.
If you recast the loan after the first payment of $50,000 + $536.82 (of which $416.67 goes to interest) you will have a new loan balance of $49,879.85 re amortized over 30 years. Your new payments will be $267.77, and if you actually stick with that payment and pay it off over 30 years you will pay more in interest. If however you pay an additional $269.05 on each payment (making your total mortgage payment $536.82 each month - the same as the 100k loan) you will pay the mortgage off on payment #118 (plus the 1st payment you made before you recast). You end up paying $13,335.86 in interest (plus the $416.67 on the 1st payment for a grand total of $13,752.53 in interest). It's exactly the same amount of principal, interest, and number of payments. Which makes sense because it's the exact same APR and you held the loan for the exact same length of time.
All recasting does is stretch out the length of the loan, you keep the same APR. If you owe the same amount of money, and stretch the term of the loan back out to 30 years, but still have the same APR all you are doing is lowering your payments so you are effectively borrowing the same amount of money for longer, which means you'll pay even more interest.
You will not, and can not save money by recasting. If you want to save money then you need to prepay your principal or refinance to a lower APR.