FHA streamline Reduction question?

I got a letter today from a small local finance company saying I can get this FHA payment reduction:

“As mandated by the Federal Housing Administration (FHA), the FHA loan obtained in December 2008 is now due for a Payment reduction of $33.51.

Additionally, as part of this FHA payment reduction and in conjuntion with the AMerican Recovery and Reinvestment Act of 2009, you will not have a payment due for a minimum of 30 days from your participation date.”

“FHA guidelines require that all FHA loans be given equal and honest access to this payment reduction………”

I researched some bits online about this and called the number on the paperwork and he told its basicly called a “streamline” refinance or something, And he says it wont cost me nothing and wont change anything but lower my payments (no closing costs or anything). He says they buy the loan off of my current lender and then lower the APR then sell it back or to another finacne company.

Anyone have ever done this or have any info on this?? Im a first time buyer and only been a home owner for about 10 months and dont know if this is a scam or if theres a draw back or something???

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One Response to “FHA streamline Reduction question?”

  1. jlf says:

    There is indeed such a thing as an FHA Streamline (no cash out) refinance program. But, it is NOT a “no fee” thing. You will pay either up front or by having the refi costs tacked onto your loan.

    Go to the FHA website to read about Streamline refis. There are a lot of scammer mortgage brokers who misrepresent them. My daughter has an FHA loan and gets at least one “Streamline Refi” junk mail offer each week.

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