I live in Nevada, and as far as I know that’s the only state where it’s legal to pay money to get screwed. Unless you count the trigger leads sold by credit bureaus when YOU pay them for a credit report. It blows me away that the big three have such a stranglehold on the market that they can get away with taking your money, and then selling the lead to your competitors. This can subject your client to major harassment by every bottom-feeding lender out there and possibly cost you a deal. It’s not as though you can originate a loan without pulling a credit report.
Some loan officers head this off by informing their clients to expect a barrage of telemarketing and mailers and recommend that they get on the national Do not Call Registry and to sign up for pre-screen opt out with the bureaus. This puts a stop to trigger leads for five years. The downside is that this has to be done at least a month before the credit report is pulled to be effective, and it requires preemptive action by the borrower.
A long term solution is to push for legislation at the state and federal level prohibiting the sale of trigger leads by bureaus. With concern about information privacy growing daily, this should be an easy sell to the public. According to The Real Estate Bloggers several states including Minnesota and Massachusetts as well as the House Financial Services Committee are considering legislation to shut down this sleazy practice. Click HERE to push your own representative to do the right thing.
For those of you who’d rather copy and paste, here’s my version:
I understand the House Financial Services Committee is considering reforming the Fair Credit Reporting Act to prevent the selling of trigger leads by credit bureaus. I make my living originating mortgages and earn my business by doing a great job and getting referrals from satisfied clients. The issue here is that when my client applies for a loan, I have to pull a credit report, and currently a loophole in the FCRA allows the credit bureaus to sell my client’s information to other lenders immediately, including the clients’ phone numbers and the fact that they are considering mortgage financing. My clients don’t appreciate the barrage from bottom feeders in the industry, lenders who aren’t good enough to generate business by doing a good job and who often make shady “bait and switch” offers to boot. It seems grossly unfair that a bureau can charge me for its product and then sell the information I provide to someone else who competes with me. Their monopoly on the credit reporting business means that I have no choice but to pay them to undermine my business. My clients are also understandably concerned about their financial privacy. Please do your part to protect my clients’ rights and end an unfair business practice by the credit bureaus.
And finally, the best defense is a good offense. The practice of using trigger leads underscores the importance of establishing and maintaining great relationships with our borrowers and earning their trust. It also means that we need to educate our clients about protecting their information and about the risk of taking a mortgage offer from someone who can’t do business in a reputable way.
Mortgage Industry Professionals. Like what you see?
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{ 6 comments… read them below or add one }
I think maybe the worst thing about trigger leads are the low life scum sucking “loan officers” who generally buy them. I’m sure there are a few exceptions, but most of the time, it’s someone who either lies, or is so incompetent that they may as well lie.
A few moths back, I wrote an article for Inman on why the subprime debacle makes me happy. The steady exodus of these so called mortgage professionals being key to my happiness.
great article, has a loan officer i’ve had many clients complain to me about the barrage of calls they’ve recieved after i’ve pulled there credit. it’s a disgrace that the credit bureaus can get away with what they do. once again great article gina and thanks for sticking up for us has lenders and our clients
But Todd, I am desperate, I need leads…just kidding.
The “lead farms” across the internet are horrendous also. I think leads should be banned from every source as the consumer gets screwed (many times over). Good article Gina.
Great article! I emailed my congresswoman about it. Hopefully we’ll get some changes soon!
comment deleted - Spam
This comment has nothing to do with my post. A vulture could be said to have a symbiotic relationship with the environment, that is, cleaning up dead stuff is helpful and both the environment and vulture benefit. Kevin, you are a spammer, not a vulture. And spammers are akin to a much lower life form than vultures, more like an opportunistic parasite that harms its host. You are a virus, nothing more.
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