Have you ever applied for a mortgage only to have a bunch of lenders call you right after your credit is pulled?
If so, the experience you had was caused by a trigger lead.
A mortgage trigger lead is a type of lead generated by credit bureaus, which indicates that a consumer has recently applied for a mortgage or has been pre-approved for a mortgage. Essentially, when a consumer applies for a mortgage, the lender pulls their credit report, and the credit bureau records this inquiry. The credit bureau then sells this information to companies that offer mortgage-related services, such as mortgage lenders, brokers, and insurance companies.
So, why would a company want this information?
If a consumer has recently applied for a mortgage, they are likely in the market for other mortgage-related products and services, such as insurance or refinancing. Companies can use this information to reach out to the consumer and offer their products or services.
While this can be a valuable tool for companies, some consumers may view these leads as an invasion of privacy, as they did not necessarily consent to have their information sold to third-party companies.
It’s important to note that consumers have the right to opt out of having their information sold by credit bureaus. This can be done by contacting the credit bureau directly and requesting removal from any marketing lists. Go to www.optoutprescreen.com/ to optout.
At the moment, trigger leads are completely legal. Recently Representative Richie Torres of New York introduced bill H.R. 2656, which would amend the Fair Credit Reporting Act to prohibit the creation and sale of trigger leads. Per the National Association of Mortgage Brokers, “H.R. 2656, would ensure that no consumer reporting agency may furnish a consumer report in connection with a credit transaction that is not initiated by a consumer, if the report is being procured based in whole or in part on the presence of an inquiry made in connection with a residential mortgage loan (as defined under section 103 of the Truth in Lending Act (15 U.S.C. 1602).”
Our stance at Smart Money Hawaii is that trigger leads should be illegal. We feel it is a total violation of one’s privacy, and creates a confusing and deceptive environment. We 100% support bill H.R. 2656 and feel the passing of this bill would protect consumers when applying for a mortgage.
