"chase rate reduction program" scam?

[divisionbell]

I received overnighted FedEx papers from Chase today.

The letter says that because I always pay on time, they want to offer me their new "Chase Rate Reduction Program." They are offering a 30-yr fixed 5.13% (I'm currently at a fixed 5.75%).

"With this exclusive program, there's no need for a home appraisal, so you won't need to worry about declining home values. Plus we'll waive all the fees so you will pay no closing costs. And, we'll make it quick and easy for you - in fact, you will not need to provide pay-stubs or tax returns, and in most cases your loan will be ready to close in 15 days or less."

Ha ha ha Somehow I don't believe them.

The number that they give to call is 1-866-818-7033, and it says I must call by May 6. I've Googled, and can't find info on this program or the phone number they give.

Chase has held the mortgage for two years. I believe it's backed by Freddie. We are not underwater - we owe 200K on the loan and house is worth about 280K. We pay a little extra to principal every month.

My big question is if this isn't a scam, then WHY? What's in it for them? I don't trust Chase at all. I think they are incompetent and corrupt.

Any insight about this?

[Jillian118]

someone else on the board got this...you may want to find that thread...i wish I could remember who it was, but it was chase also

[divisionbell]

I did see that thread. The name of the program in the letter was different, and it gave a different phone number to call.

That just makes the whole thing seem more odd
Wonder what Chase is up to...

[SurfwhenUcan]

I did see that thread. The name of the program in the letter was different, and it gave a different phone number to call.

That just makes the whole thing seem more odd
Wonder what Chase is up to...

Fishing expedition by their retail division, most likely. As long as it IS your lender and you won't waste money on an appraisal, check it out.

Don't bother if you have a lot of years into your mortgage though, they will re-extend the amortization to another 30 years. There are sites online that can help you evaluate whether there is a net benefit to you.

[divisionbell]

Thanks Surf!

I'm not going to call. It's a tempting offer if true, though. If I refinance, it won't be with Chase. They've blown me away with their incompetence the few times I've dealt with them. Call me skeptical, but I imagine the process would not be as easy as they claim.

[SurfwhenUcan]

Thanks Surf!

They've blown me away with their incompetence the few times I've dealt with them. Call me skeptical, but I imagine the process would not be as easy as they claim.

The incompetence is part contrived and part real. The process is never as easy as they say and your balance usually goes up. 5.75% fixed is a smokin' rate unless you want bragging rights. Before you pursue a simple rate/term refinance, consider whether you are going to pay off the loan over the full term or sell and buy a new house sometime in the next several years. If the former, a slightly lower rate might make sense, otherwise maybe stick with what you have - you may end up with a worse lender than you have just to save a few dollars - I don't know of any lenders receiving glowing reviews.

[Homebody]

It can actually be legitimate and worthwhile. I had a good offer like that one day. They FEDEX a package to me offering a 1.19% interest rate on $750,000 loan that was underwater. I had so many days to accept and I was very suspicious. I finally called on the last day and the guy told me that it was like winning the lotto as I had been chosen and only 15,000 people were offered this. He said I could still do it by faxing him the documents. It was the best deal I've ever been offered. I am paying $1800 a month on the principal and in a little over a year have paid over $25,000 in principal.

I later learned that you cannot get modified on a jumbo loan like mine. So check it out. As long as it is Chase, there shouldn't be a problem.

[Evan Bedard]

They FEDEX a package to me offering a 1.19% interest rate on $750,000 loan that was underwater. I had so many days to accept and I was very suspicious. I finally called on the last day and the guy told me that it was like winning the lotto as I had been chosen and only 15,000 people were offered this. He said I could still do it by faxing him the documents. It was the best deal I've ever been offered

Wow I have never heard of anyone receiving this before.. There is something very fishy about a 1.19% interest rate on a jumbo mortgage. Never heard of any jumbo mortgages even getting down to 2%..

[Homebody]

Yes...its the honest truth. I have been paying now for one year and its the same loan number and same bank.

I think I had one of those bad loans and they wanted to make sure I didnt default on it..I dont know but it is a normal loan..nothing fishy about it.

[BorderSmith]

I can't believe this. My payment on $416,000 was $2,200. They gave me a temp mod in Jul, 09 with a payment of $1,426, but have never given me a final. Then Dec, 09 they sent me a forbearance agreement changing my payment to $1800 with an $1800 cash payment without EVER denying my original mod app. I refused to sign. April, 10 they verbally told me that they have denied my mod, but I've never gotten it in writing, and have since stopped making payments altogether. If they can give you a jumbo at $1800 why not help me?????

I Filed complaint with the OCC, but so far haven't gotten anything from them either.

This is so crazy and stupid. With TARP money our guvmint has dis-incented lenders from making mods? Why should they? They make more from foreclosure and TARP

[xPhope123]

Out of the blue, never late on a payment, I received a loan mod package from Chase. The loan was one of the ugly ones from 5 years ago originated with WAMU (Option ARM, added unpaid interest to Principal current month rate is 2.571%). However, it was scheduled to reset this summer. The house is underwater by $30k or so. Mod offered a fixed 4% rate amortized over 38 years. The terms meant the payment is equal to what I've been paying the past year and will never change. The house is currently a rental and likely the best rate I could get on the open market so I took the offer. I called Chase to ask why it was offered. Their answer "you've never been late...". I was told by a realtor that those getting mods in general are good risks. Banks are weighing the risks and if the borrower doesn't have good job/work history it is riskier for the bank. Good luck everyone. In another 5 years we will be through this mess.

[SurfwhenUcan]

Out of the blue, never late on a payment, I received a loan mod package from Chase. The loan was one of the ugly ones from 5 years ago originated with WAMU (Option ARM, added unpaid interest to Principal current month rate is 2.571%). However, it was scheduled to reset this summer. The house is underwater by $30k or so. Mod offered a fixed 4% rate amortized over 38 years. The terms meant the payment is equal to what I've been paying the past year and will never change. The house is currently a rental and likely the best rate I could get on the open market so I took the offer. I called Chase to ask why it was offered. Their answer "you've never been late...". I was told by a realtor that those getting mods in general are good risks. Banks are weighing the risks and if the borrower doesn't have good job/work history it is riskier for the bank. Good luck everyone. In another 5 years we will be through this mess.

If you think about it from the bank's perspective, they know it is a rental and there really are no progams out there for investment properties so your chances of getting it mod'd are slim to none. That debt was performing, meaning payments were coming in on time. However, statistically, over 95% of Option Arms that reset to the fully amortized payment on an underwater home, even if it's the roof over your head, that homeowner will walk - resulting in foreclosure. It's more like 100% on investment properties. They pulled your credit and saw you were a good risk in other areas and figured this was their best bet. They also knew it was very likely that this was a predatory loan probably sold with TILA and RESPA violations. this all created the perfect storm of banker's consternation for you to get a great outcome. Congratulations!

[teriw]

I have about 7 years left on a 5% mortgage and wanted to know if this would be a "push of the button" "closing" for the remaining 7 years or, as I suspect, this is a scam or a longer-term mortgage.

I gathered my mortgage statements for the past year and made the call. I then asked and then received the following answers:


Q: Why is my "current" balance is $3,300 higher and rounded up to the nearest $10,000?
A: That is the amount the system entered when the document was prepared.

Q: Can Chase use my real current balance in place or my payoff amount at the closing?
A: No. This amount has been pre-determined and cannot be changed.

Q: So this is how Chase can offer "no fees" for this "mortgage rate reduction" aka new mortgage.
A: No response.

Q: The "closing" documents I would be signing, is this to reduce the rate for the remainder of my mortgage or is this a new mortgage?
A: This is a new 10-year mortgage.

Q: I am looking at my amortization schedules and by entering this program I would not be making out on this "new" mortgage.
A: If you continue to make the payments you currently make you will pay off this loan 4 months earlier.

Q: I would not be. I currently own $xx,xxx. Using your numbers and calculations, I will be paying an additional $4,000 in P&I.
A: You have 86 payments left, not 84.

Q: No, I have 84 payments left. Again, using your numbers, I would be paying an additional $4,000 in P&I.
A: (Chase rep ignores my comment). . . By taking advantage of this program (he really means, by letting Chase take advantage of you for an additional 3 years longer than necessary) you will be saving money.

Q: I am sorry, but this program is not for me.
A: So you are saying you are not interested?

Q: That's correct.
A: So you're saying you are not going to participate, is that correct

Q: Yes, that is correct.
A: Thank you for using Chase.

End of conversation. Wow, "thank you for using Chase"? Give me a break. My mortgage was sold by Mid-America to Chase!

If Chase really wanted to do something for me, lower the interest rate on my credit card. Oh wait, they cannot do that. I pay the card off monthly or over a period of no more than 3 months.

That would definitely NOT be in Chase's best interest to do that for me!