Lower mortgage interest rates coming from your existing lender?


I can’t even tell you how many calls we’ve received over many months where people described a most unusual situation: They would get a packet in the mail from the bank (typically via Fed Ex) that holds their mortgage offering a new lower interest rate on the loan, with no appraisal and no costs whatsoever.

Now, I looked at it from every angle and it didn’t seem like a scam to me. But so many people thought it was, perhaps because I’ve trained you to enter into the realm of paranoia at the drop of a hat! Yet people told me they would tentatively go through with the process and then much to their surprise actually get a reduction in their interest rate of about 1.5% or even 2%. Again, at no cost to them!

The calls we got repeatedly talked about Chase being one of the most prominent banks doing this. (There were also scattered calls about other lenders doing it as well.)

The deal is that Chase gets a commission from the federal government to redo certain loans, what’s often called a “fast track refi.” We as taxpayers, through the Federal Treasury, essentially pay the bounty to get Chase and others to reduce the interest rates on these loans.

Now here’s the bad news: You can’t call up and say, “I want that deal that my buddy got!” Chase will not disclose the criteria they’re using to decide who gets the fast track refi, though it’s pretty clear this deal only applies to loans that are owned behind the scenes by Fannie Mae.

Before I knew these details, I had been speculating that this program was geared to situations where it looked like default was possible in spite of on-time payments. And before that, I initially thought banks were offering this to people who fit a profile of somebody who could go refi elsewhere that they might lose as a customer. But that was flat-out wrong.

So if you get one of these packets in the mail, know that it’s the real deal.   

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