Mortgage Technology

Legislation Targets Trigger Leads

In case you are unfamiliar with the term, a trigger lead is information regarding financial data about a person who has applied for credit that is supplied to a third party who is not part of the initial transaction.  In the mortgage industry, it specifically refers to information that is sold as leads by the three largest credit agencies (more commonly referred to as “the bureaus”) TransUnion, Experian and Equifax.

Wisconsin Department of Financial Institutions Steps In

The Wisconsin Department of Agriculture and Consumer Affairs, supported by the Department of Financial Institutions support this bill, which is intended to protect consumers from the confusion and inconvenience caused by these trigger leads. Companies who deal in leads and violate the new rules will find themselves paying fines to the State of Wisconsin. Catherine Haberland, head of legislative affairs for the Wisconsin DFI, testified before the legislature on October 4^th. She said “DFI believes our laws should protect a consumer’s privacy – a person should be able to walk into a bank or credit union and apply for a loan without a third party selling the details of that transaction to other lenders. “ I couldn’t agree more, and I have the feeling that all consumer and most loan originators will also welcome the new laws.

Loan Originators Get Compromised by the Bureaus

Imagine being a loan originator, with a hard earned referral in hand, paying an agency about $15-$18 to get the clients’ credit report and then the company you paid to pull the credit told your competitors what you were doing and with whom and sells the information for pennies?? A mortgage broker told me, last week, that he pays a meager thirty cents each for trigger leads.

Then, the clients’ phone starts to ring at any hour of the day, any day of the week, in quantities that become an absolute annoyance to the point of souring a possible client on the whole process. This type of nuisance calling gives the entire mortgage broker industry a bad taste for almost anyone who has ever experienced this. I have even heard the loan officer getting blamed, because the client has no idea where else these calls would have originated, since they only applied at that one trusted source.

On top of that, it seems like a conflict of interest for the credit bureaus to expose the personal information of people whose credit they are charged with protecting, without permission from that person. There are ways for the consumer to opt out of this practice. It is like getting yourself onto a “do not call” list.

How to opt out of trigger leads Assuming you don’t want your personal data to be sold, there are two ways to opt-out of trigger lead programs. First and easiest way is to fill out the online form at http://www.optoutprescreen.com. This will stop trigger leads for five years. The other way, which will stop trigger PERMANENTLY, is to print the available form, complete it,  and mail a letter generated by that form to confirm your request.  It takes five days for the request to become active, so if you are planning on applying for credit, do it five or more days in advance of applying.Here is a link to the Wisconsin Legislation; http://www.legis.state.wi.us/2007/data/AB-502.pdfOne website that is doing something about this is Lender Rate Match. (http://www.LenderRateMatch.com) This site allows the consumer, to pull their own credit while shopping for a mortgage. When a consumer pulls their own credit, NO trigger leads are created. Additionally, this website scans their databases of numerous lenders, finds the one with the lowest rate, and connects the consumer to a lender who will supply that rate. The rates that are displayed there are the broker “par” rates, the same rates the broker pays, thereby leveling the playing field for the borrowers. So, the consumer only has to find and compare the actual closing costs and fees involved, based on the broker’s rate.

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