Could new technology replace trigger leads if the controversial practice is limited or banned?
Legislation to curb the practice of trigger leads is continuing to wind its way through Congress, and some mortgage industry watchers believe companies could turn to artificial intelligence and new technology to reach out in other ways to potential customers earlier in the process if it succeeds.
Trigger leads, or the consumer leads generated when someone applies for credit, are controversial. If the current legislation passes, they will largely disappear.
This will require lenders to find other ways to reach out to mortgage customers when they are ready to begin the homebuying or refinancing process. Many of these lenders appear to be preparing for trigger leads to disappear.
Many companies have announced new initiatives, including some AI-driven, to reach customers in some cases before they even know they’re ready to make a mortgage application.
Bruce Gehrke, senior director of wealth and lending intelligence with JD Power, sees companies preparing for those controversial leads to disappear, or to be limited to the servicer.
“I think at some point, sooner or later, there's going to be a restriction on that,” Gehrke told Mortgage Professional America. “I find it interesting that they're looking for a carve-out. I think that goes against the spirit of limiting trigger leads like giving somebody, the servicer, the right to do that.”
He believes lenders must understand their customers long before they’re ready to shop for credit.
“You know that consumers' behavior before they get to the point where that credit report is being run by somebody else,” he said. “I think a lot of it is a way to get ahead of that. I think at some level we'll probably see some restriction on it.”
‘It just doesn’t make a lot of sense’
Gehrke is surprised that more consumers aren’t upset that companies have the right to create trigger leads.
“It's one of those things that consumers haven't really thought much about it,” he said. “But if you think about it like, ‘Why does a credit bureau have the right to sell the fact that I'm applying for a loan to somebody else?’ It just doesn't make a lot of sense.”
Brendan McKay discusses the renewed push for the trigger leads bill, stressing the importance of broker involvement in contacting Congress. With growing support, McKay believes this could be the year for progress.https://t.co/qr85IvhboI
— Mortgage Professional America Magazine (@MPAMagazineUS) April 23, 2025
Expect the credit bureaus to fight back, as this could reduce their revenue. Data brokers also buy trigger leads in bulk and sell them to mortgage lenders and other institutions.
“Obviously, there's revenue in it for them, so it's going to be a bit of a battle,” he said. “But from what I've heard in the industry, the cost of soft pull credit reports, which aren't reported like that, has skyrocketed, because nobody wants that hard pull until that really nails somebody down.”
Jim Nabors, president of the National Association of Mortgage Brokers (NAMB) told Mortgage Professional America that he is hopeful that the bill might get passed by the end of September.
“I’m always an optimist, but the big difference this year compared to previously, is all of the (mortgage) industry is on the same page,” Nabors said. “We are all together and united on this, and I’m hoping that will be the biggest advantage. Anytime you can unite the industry on issues, it’s always going to be an advantage.”
New technology makes early contact easier
Several companies have introduced new technology to reach potential mortgage customers before they apply for a new loan. Gehrke said even if trigger leads don’t go away, eventually brokers who wait for that lead may be playing catch-up.
“People are talking about this, loan officers are talking about this, and want to get in front of the application,” Gehrke said. “The data supports getting in front of that application, because if you're not talking and working with buyers and borrowers before they're putting in an official application, which would trigger a hard credit pull, then you're behind the curve.”
Gehrke sees the benefit in AI allowing brokers and loan officers to keep in touch with past customers, which allows them to stay in the client's mind and earn repeat business.
“If you're a loan officer that's been in this business for a long time, and you've been diligent about keeping contact information up to date, and you dump that into a program, and you let this thing run and analyze different data points,” he said. “There's so much capability when you see what is capable in artificial intelligence, developing agents that may look at other databases, assess equity levels, try to understand other pieces of consumer data, and combine all that very quickly. It is game-changing.”
United Wholesale Mortgage (UWM) president and CEO Mat Ishbia said during UWM Live that he believed brokers who use AI technology would have an advantage over those who do not. Gehrke agreed with that assessment.
“Once you get into that AI environment, it becomes one of those things where if you're not doing that, you're at a tremendous disadvantage,” Gehrke said. “Just from the scale and speed at which people can make contacts.”
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