Mortgage Trigger Leads May Be Shut Down By Federal and State Laws
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Trigger leads, those insidious creatures that credit monitoring companies sell when someone pulls your credit file for a mortgage application, are coming under increased pressure from state and federal government agencies. Typically what happens is that you apply for a mortgage and the lending company runs a credit check.
Then about 12–24 hours later your phone starts to ring off the hook. Shady, low down dirty scum sucking mortgage brokers (can you see I am a fan?) start making promises of lower rates or fishing for information to run a competing offer for your business. What is scary is that if you fall for their lies and scams you have the chance of not even qualifying for the original loan because of all the activity on your credit reports. And who gets this information to these lowlifes, the credit companies themselves who make a pretty penny selling your information. A vicious circle that captures you the borrower in at best an annoyance and at worst subject to a con.
These folks are bottom feeders of the lowest variety. Next week I will have a post on how to avoid the Mortgage Trigger Lead scrapers, but for now here is how governments are getting into the action trying to stop these unscrupulous lenders.
These days, mortgage shoppers like Ashley are supreme telemarketing targets, thanks to “trigger leads” that the credit reporting bureaus sell to lenders the instant a consumer’s credit file is pulled by a loan officer. So when Ashley’s lender checked her credit to prepare her loan, dozens of other mortgage companies were tipped off. These alerts can be had for a few bucks per name if bought in bulk.
This is legal - though not necessarily for much longer. A few states have been exploring restrictions on the practice, and last week Minnesota’s governor approved a block on most trigger leads. A ban is pending in Massachusetts.
Potential Congressional action is brewing as well. The House Financial Services Committee, chaired by Rep. Barney Frank, D-Mass., is investigating the issue in advance of hearings it expects to hold on a broad review of the credit-reporting agencies, according to committee spokesman Steven Adamske. Such hearings could find that trigger leads have drawn some powerful enemies.
The proposed ban in Massachusetts, for example, was floated by the state bankers’ association. Its chief operating officer, Kevin Kiley, fears that “the trust that has been established between the bank and the consumer has been essentially undercut” because of trigger leads. via BostonHerald.com
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Comment by Carolyn Warren on 2 June 2007:
We like to think our credit is a personal matter–but surprise!–the credit bureaus are selling it behind our backs, without our consent or knowledge.
Not only do they sell people’s credit reports, but they also include your home telephone number. This is an outrage!
Somehow, we don’t expect the credit bureaus to pass along our private information like this. When I was doing research for my book, Mortgage Rip-Offs and Money Savers, I discovered there is a way for Americans to prevent this disgusting practice.
Go to http://www.optoutprescreen.com and opt out. Then if a parasite mortgage company calls you, send a message with a quick, “No thank you; I don’t do business that way.” If everyone will do this, they’ll discover buying trigger leads is a waste of their money.
Carolyn Warren, Mortgage Rip-Offs and Money Savers (Wiley & Sons)
Comment by N'Dji Jockin on 5 June 2007:
So the logical conclusion is that lending tree and their theme “when lenders compete, you win”, along with anyone else who is eager to offer there legitimate services at competitive prices, is scum of the lowest order.
You must come from, or be an established brokerage that would like to keep your stranglehold on the local clientele. If you were competitive, you would have nothing to fear from healthy competition. Competition that will ultimately keep this practice legal and viable. Our company is scum-free, maintaining the client’s benefit at the center of our consultations. If we can provide a bettter loan we ask for the business. If we cannot add value, we will not ask for a sale. Period.
Maybe you dont have the discipline to resist.
Comment by Michael Allen on 9 July 2007:
exceptionally poor analysis- perhaps outright retarded
Comment by tcurranmortgage on 17 July 2007:
Comment to the article: I don’t have any experience with my clients getting “pounced” by a trigger-leads call as most of my business is referral-based.
But, I have heard stories from other L.O.’s how the slime-bag trigger-happy originator calls claiming to be working on the loan application from the original inquiry!
“Hello, Mr. Jameson? I’m Scott and I’m just following up to gather some more information for your loan application…oh, well, now that I have that info, I realize I can offer you a much better rate…blah, blah, blah”
It sounds pretty easy, doesn’t it?
Response to N’Dji Jockin: if you are an experienced L.O. and you’re NOT considering most of our industry populated in the last three years by lowlife scumbags, then you’re definitely missing something in terms of a reality check, my friend.
Don’t get on your high horse claiming how you “add value” and ignore the fact that in recent years we experienced professionals have lost a lot of business to lowlife liars claiming to be mortgage pros.
Frankly, I doubt you really have any experience at all. Anyone who uses the term “add value” like that probably just finished loan officer school a couple of weeks ago.
Comment by Art Blanchet on 2 August 2007:
Nice blog. A few weeks ago Bill Quigley and I did a radio show specifically about “trigger leads” on Your Home-Your Money (9 AM on WTDY-Madison). What a betrayal of confidence! And what a scam!
The lead-buying companies - there is no screening process by the credit repositories, just lay down your cash - will even stoop so low as to PRETEND to be the consumer’s lender, asking for just a “few more details” to complete the loan aplication. The door is being opened wide to identity theft, but we can fight back by taking the profit out of trigger leads.
Advice to consumer: Don’t give any info over the phone to someone you do not know. Nothing. Period.
Advice to lenders: Protect your borrowers. They depend upon you. Give them a form or card with the names of your assistant(s) and partners and specific email addresses and phone numbers for communication. Tell them why you are doing this.
ALSO, devise a telephone password system to safeguard them: “Hi, I’m with XYZ Mortgage calling for Art. The password is ‘Banana Peel’ and my name is Suzy.”
Sounds dumb, but if you want to protect your clients from bait and switch tactics and identity theft, put out a little effort. Do this also to KEEP them your clients - don’t lose them to the liars.
These are tough times. If people ARE to use the http://www.optoutprescreen.com option (mentioned by Carolyn Warren above), they need to opt out a minimum of 10 days before their credit is pulled - a month would be better.
Spread the word to your database via postcard, email, and voice - you are performing a public service AND touching base with your clients for a valid reason. The trust you build will be rewarded in time.
Be a true professional and help keep lending a safe practice. Best wishes to all.
Art Blanchet
Comment by Reggie on 2 November 2007:
I have always used trigger leads to obtain business. I only get these loans if I am able to offer a better product or the customer feels more confortable dealing with myself.
Stereotyping all people who use triggers as low lifes is ridiculous. There are irresponsible LO’s and bait and switchers in all areas of the mortgage business. Just because someone uses a specific tactic to get people on the phone that want to do a home loan, does not make them bad people
Pingback by Pulling the Trigger on Credit Bureaus | Mortgage Industry Blog on 27 November 2007:
[...] 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 [...]
Comment by Jake on 3 February 2008:
I’ve worked as a Mortgage Broker for past five years and last two years at a company where we generated business exclusively through trigger based leads. Now I am over at one of the largest National Lender/Bank. So will say this, Trigger Leads are direct invasion of privacy and should be banned. This trigger leads enables brokers and give false sense of trust to those who calls brokers after receiving this letter based on trigger leads. They are grossly misused and are horrible for consumer privacy. Only reason it is still around is because somehow it is completely legal for these credit agency to sell our information for their profit sakes.
Contact your local legislative representatives and ask them to join the ban of trigger leads.
Comment by Stephen on 20 March 2008:
I personaly use trigers as a way to earn business. I do not lie to them when I call and all I ask for is a chance to earn there business. Everyone has a a 30 day window to shop around for the best deal and if I am able to beat the other compitition then more power to me. Those that don’t like this service are the ones who are afraid.
Comment by Tom on 20 March 2008:
Stephen,
If you are ethical they can be a benefit to the consumer, but the problem is that most trigger guys are not. Bait and switch are typical in the field and thus give it a bad name.
Sort of like speeding. If every one did 10 mph over the speed limit and drove safely, few would have a problem. But there are the idiots going 30 mph over the speed limit and swerving all around. This forces the cops to come onto the road and everyone is stuck going much slower.
Comment by James on 21 April 2008:
It’s funny that people who work for the banks have this idea in their head that they are upright and supreme, while the “lowlife” broker is “scum” and deceitful. Very comical indeed. It is the banks, that feed off of consumers, give kickbacks to congress to change laws in their favor, and ultimatley want to take every dollar from every person, broker, and LO inside and outside of their corportation that has low morals. Yes, there are lowlife people in every aspect of life. But there are also very good people. Do you ever ask yourself why a bank NEVER has to disclose YSP, yet brokers do? Why a bank CANNOT waive its commitment fee, yet a Broker can waive their app fee? Its because the industry is filled with greed, and it starts at the top. Find me a broker house that pays its CEO $300 Million as a bonus, and then we can talk about who the “Scumbag” is. And no, I am not a first year LO, I have a masters degree in finance, and just find it funny when people on their high horse, who rob from EVERYONE, talk down on others to try to make themselves feel good. Countrywide, Citi, Bank of America, Chase, Wells Fargo, ect… They all try to steal business, and take EVERY dollar they can. Realize when you look in the mirror, the person you really see.
Comment by Mortgage Trigger Leads on 7 October 2008:
Trigger leads are great for the consumer because it gives them the best deal. They have numerous companies contact them with better quotes then they already received. Sure the consumer gets a few more phone calls but I think that they can handle that if they save a few hundred dollars each month on their mortgage.
Comment by glenn on 4 November 2008:
you gotta be kidding me! “mortgage trigger leads” posting a comment on the plus-side of trigger leads? no, that’s not bias or self serving…what a joke. “mortgage trigger leads” is a ridiculously unoriginal company with no redeeming marketing skills whatsoever. trigger leads are great for the trigger lead seller, period. get a real job losers!
Comment by charlyb on 20 June 2009:
Trigger leads can help the customer, but like any of the banks compete you win type lead- banks will lie to get you to the closing table.
Trust me loan officers do not love these things. Imagine working a loan, pulling someones credit, which by the way you paid to pull, and all of a sudden your customer gets 10 calls trying to nab the deal from you.
In any case- if your wondering what can and can not be done by loan pro’s in your state- this resource was great:
http://www.bankapedia.com/mortgage-encyclopedia/state-mortgage-laws