patrick.net

i got an incredible sounding call from my well fargo (WF) mortgage broker a few weeks ago. WF offered to reduce my interest rate to 4.375% and reset my 30 year fixed mortgage to a new 30-year fixed, for free.
now that the deal has closed, i haven't found any gotcha; no closing costs, no prepayment penalties, just a lower rate. even the WF notary did not charge us.
besides myself, a co-worker was refi-ed in july. another co-worker got a call from B of A at the end of september offering to refi his mortgage for free.
i bugged the broker about why he thinks WF is doing this. he said they are trying to refi 100,000 loans per month. even though my mortgage wasn't at risk, the 'system' does a sweep of all loans and picks some for the offer.
mish had a post on this also....strangely the day i got the call from the wells fargo broker.

http://globaleconomicanalysis.blogspot.com/2010/08/benevolence-by-jpmorgan-jpmorgan-offers.html

i am suspicious that the government is underwriting some of the cost of the transfer. there is the obvious underwriting in that the fed is buying mortgages to drive down the rate. the other, is whether some federal office is paying the bank per refi. evidence of this second type of underwriting would be if these deals go away after the election. afterall, this is a stimulus program. my mortgage payment is lower, so i could spend the difference.

#housing