FAQs

1. What is a Rate Reduction? How does it differ from a typical refinance or a FHA streamline transaction?
2. How is AMERICAN BANK able to offer free payment reductions?
3. Why don’t I have to requalify to participate?
4. How do I know that this is legitimate?
5. How much can you lower my mortgage payment?
6. Will my credit or payment history prevent me from enrolling in the program?
7. Why hasn’t my current mortgage company contacted me about this program?
8. Why aren’t Rate Reductions advertised?
9. Is a rate reduction the same as a traditional refinancing?
10. What is the difference between an FHA/VA Streamline and the AMERICAN BANK Rate Reduction Program?
11. What is the process? / How can I get started?

1. What is a Rate Reduction? How does it differ from a refinance or a FHA streamline transaction?

   Although not widely advertised, basic FHA streamline transactions are very common. HUD created the FHA streamline program to allow responsible FHA borrowers the ability to take advantage of improving rates or terms without the burden of undergoing the entire mortgage application process again. FHA has permitted streamline refinances on insured mortgages since the early 1980's.
   
   Here is the distinction. The "streamline" only refers to the amount of documentation and underwriting that needs to be performed by the lender, and does not mean that there are no costs involved in the transaction. The American Bank Rate Reduction Program allows borrowers the reduced documentation via the streamline program, but also the ability to benefit from the savings with an option to not have the routine title and closing fees added to the loan balance.
   
   Here is why consumers choose American Bank. Unlike most lenders, American Bank’s Rate Reductions Program gives borrowers lower mortgage payments or shorter terms, without adding the fees to borrowers’ loan balances. Read more about the program.

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2. How is AMERICAN BANK able to offer free payment reductions?

   The payment reduction is NOT free. Ultimately, all mortgages charge interest. Borrowers often confuse us paying the title fees on a transaction using our Title Fee Credit (TFC) as the loan being free. Instead of charging fees upfront, borrowers are ultimately choosing to pay the costs of getting a lower payment of the course of the loan, by paying a slightly higher rate than the rate that requires upfront costs.
   
   Considering that there are no prepayment penalties or restrictions on FHA loans, borrowers looking to stay in their home for short periods of time and borrowers that are concerned about their loan balances find the Title Fee Credit (TFC) a tremendous value. Otherwise, they would be stuck paying higher mortgage payments when paying refinance fees would not be cost justifiable. See the Transaction Comparison or Benefits page for more details.

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3. Why don’t I have to requalify to participate?

   Borrowers go through a lengthy and tedious application process when they initially enter the FHA and VA program. When we assist them, there is no need for the same requalification. The loan is basically the same. The payment is just lower. Credit is often checked as a lender precaution, but HUD does not require that a borrower have a particular credit rating or any minimum FICO score. Obviously, if a borrower is able to pay a mortgage payment, they would be able to pay a lesser payment with ease. HUD is already insuring the mortgage at the higher payment. A loan with a lower payment would potentially reduce HUD’s default risk. Start the process of lowering your payment now!

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4. How do I know that this is legitimate?

   The primary guidelines of the streamline rate reduction programs were developed by United States Department of Housing and Urban Development (HUD). AMERICAN BANK is a HUD-Approved federally chartered bank. All sources will show that we have a great reputation, but hearing from ACTUAL people that enrolled always helps. Please Click Here to Read and Watch Real Client Experiences.

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5. How much can you save me each month on my mortgage?

   As far as specific savings, the markets change too rapidly for us to accurately post rates or pricing for your specific transaction. Newspaper, mail and Internet advertisements that post rates are generally accompanied by terms, conditions and exclusions. Since loan rates and pricing are based on very specific criteria, you should understand that these offers may not be commitments to lend and may still be subject to the normal application and approval requirements.
   
   At American Bank, we will gladly speak with you and give you an unbiased overview of ways you can improve your mortgage. This is helpful to most people that call us. On average, most FHA and VA borrowers have missed at least 2 opportunities for free mortgage payment reductions, because they did not have the resources to identify the opportunities as they arise. We guarantee our clients the best overall loan value and expert loan structuring. No bank can guarantee the lowest rate or fees. However we can guarantee that we are always competitive and fair and we will always provide exceptional service. If we make an offer and for any reason we are undersold under the same market conditions, we will match the written commitment offer and or release your file.
   
   We understand that your overall best interest always comes first. Start the process of lowering your payment now!

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6. Will my credit or payment history prevent me from participating in the program?

   There are two differences. Anyone with an FHA or a VA loan can enroll their loan. Once the loan becomes rate eligible, the borrower can then apply to participate in the streamline program. Enrolling allows us to tell you if your rate qualifies. By enrolling people separately, we avoid having borrowers waste time applying when there are no options available. Your overall credit history will NEVER prevent you from enrolling.
   
   To participate, borrowers must meet some basic requirements. However, we do approve borrowers that have paid their mortgages on time for the past 12 months that have experienced some credit difficulties in the past. Enroll now!

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7. Why hasn’t my current mortgage company contacted me about this program?

   The simplest way to answer this question is with the following question:
   
   If your mortgage company already has you paying more each month, what would be their incentive to encourage you to pay less?
   
   Mortgage companies makes money off interest that borrowers pay each month. The higher your interest rate, the greater their profit. American Bank believes that we can offer competitive rates and still remain profitable. We create programs with borrowers in mind.

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8. Why aren’t Rate Reductions advertised?

   HUD created the streamline rate reduction program to minimize the amount of HUD foreclosures and the amount of unnecessary interest that consumers pay mortgage companies and banks. Assisting borrowers with rate reductions tend to be far less profitable than a traditional refinance for most institutions. American Bank uses the streamline rate reduction program as a means of developing relationships that result in more lending activity.

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9. Is a rate reduction the same as refinancing?

   A Rate Reduction is a particular type of refinance transaction. However, there are MAJOR differences between traditional refinances and FHA/VA streamline rate reductions. Traditionally a refinance transaction involves a credit, income, and asset review. A Rate Reduction DOES NOT require asset and income requalification. The credit requirements are also reduced. It is a refinance, but the hassles that people associate with refinancing are eliminated.

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10. What is the difference between an FHA/VA Streamline and the AMERICAN BANK Rate Reduction Program?

    The AMERICAN BANK Rate Reduction is an enhanced, less expensive version of the FHA/VA Streamline Program. FHA/VA Streamline Programs just allow the borrowers to bypass the appraisal and income documentation process. For a more in-depth explanation, click here.

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11. What is the process? / How can I get started?

    Online

    • Click here if you received a notification by mail and want to get more information and check eligibility.
    • Click here if you are new to the program and want to enroll for free.

    Telephone
    
    Call us now Toll FREE at 1-866-620-8787
    
    The introductory overview call generally takes about 10 minutes depending on how many questions you have. Please have a recent mortgage statement on hand.

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