FHA Reduction Notices From Third-Party Companies – Scam? Or Something To Consider?

We’ve got an FHA loan on our house with a 4.75% interest rate.

We get a lot of seemingly junk mail but one item from “American Financial Network” caught my eye:

The Federal Government recently passed the Economic Stimulus Act (H.R.
5140). Homeowners with FHA mortgages have the opportunity to lower
their monthly payments through an FHA streamline loan with no points
or appraisal fees. Recent changes to FHA guidelines ahve made it
possible to Streamline your current FHA mortgage to a new lower rate.

As a part of this Stimulus Act, your mortgage can now be streamlined
to a 30-year-fixed loan with an interest rate as low as 3.875%. This
loan will be insured by the Department of Housing and Urban
Development and is subject to FHA underwriting guidelines. Call
866-444-2494 for answers to any questions that you may have

This really is an extraordinary opportunity, and we look forward to
serving you. Please call one of our polite and informative
representatives today.

There’s a lot of red flags here that make me suspicious but I’m wondering if there’s any real value I could be overlooking.

Thoughts? Could this be legit?


One Response to “FHA Reduction Notices From Third-Party Companies – Scam? Or Something To Consider?”

  1. This is obviously a spam mail. Your mortgage is a public record, and mortgage brokers and insurance agents were, are and will be soliciting your business, as long as they feel they have a chance of getting it. Nothing that that particular company offers is unique to them, nothing they can offer you cannot be done by anyone else.

    It is my personal belief that we should not do business with spammers, and that is why I suggest you to remember the company name and never deal with them. However, it is up to you if you want to follow that advice or not.

    What they’re offering is called refinance. Any bank, credit union or mortgage broker does that. The rates are more or less the same everywhere, but the closing fees and application fees is where the small brokers are making their money. Big banks get their money from also servicing the loans, so they’re more flexible on fees. All of them can do “streamline” refinance if your mortgage is eligible. None if it isn’t.

    Note that the ones who service your current mortgage might not be the ones who own it, thus “renegotiating the rate” is most likely not an option (FHA backed loans are sold to Fannie and Freddie, the original lenders continue servicing them – but don’t own them). Refinancing – is a more likely option, and in this case the lender will not care about your rate on the old mortgage.