Trigger leads – how borrowers can opt out

Rather than wait for legislation, borrowers can simply opt out of sales calls

Trigger leads – how borrowers can opt out

Applying for mortgage preapproval can be the exciting start of a journey toward homeownership. The problem is that a borrower’s credit information is then sold, leading to a flood of calls and texts from businesses trying to sell their services.

Lobbying efforts are underway by several trade associations to eliminate or drastically reduce the practice. Once a borrower’s data is shared with companies, they unwittingly become a “trigger lead” when those firms buy the information from credit agencies.

Many find it hard to believe the credit agencies themselves are the ones selling the financial data.

“It’s shady, but it’s legal,” Rebecca Richardson said. Short of waiting for legislative action to curtail the practice, the loan originator at Kind Lending said borrowers can take matters into their own hands to stop the sale of their financial information under the Fair Credit Reporting Act.

Taking matters into their own hands

“The process, though not widely publicized, is straightforward,” Richardson said. “By visiting the official opt-out website, you can prevent your information from becoming a ‘trigger lead’ for countless marketing pitches.”

Richardson said it’s well worth the effort to opt out of receiving sales calls. “It’s a step toward taking control of your personal data and well worth the few minutes it takes to complete this request,” she said.

Better yet, Richardson urges borrowers to opt out even before getting preapproved for a mortgage.

Efforts underway to push legislation

The Mortgage Bankers Association is among the groups trying to curtail the selling of consumers’ data by the credit agencies. To that end, the MBA was instrumental in the recent introduction of the bipartisan Homebuyers Privacy Protection Act in the US Senate.

In a prepared statement, MBA’s president and CEO Bob Broeksmit expressed gratification in seeing the proposed legislation gain steam: “MBA and its members have led the industry in advocating for legislative reforms to stop the unwanted harassment of consumers resulting from trigger lead abuses,” Broeksmit said. “We commend Senators Jack Reed (D-RI) and Bill Hagerty (R-TN) for introducing the Homebuyers’ Privacy Protection Act to protect consumers while preserving the legitimate use of trigger leads in appropriately narrow circumstances during a real estate transaction.”

Broeksmit said the MBA would continue to advocate for the Senate bill along with the Protecting Consumers from Abusive Mortgage Leads Act (HR 4198) that was introduced last year. Also bipartisan in nature, that bill was led in the House by Representatives John Rose (R-TN) and Ritchie Torres (D-NY).

Another group taking aim at the trigger leads scourge is the Association of Independent Mortgage Experts (AIME). In an interview last summer, AIME’s CEO Katie Sweeney detailed to Mortgage Professional America the breadth of action the group is taking to curb the practice.

“Our goal, first and foremost, is to make sure legislators understand this practice is taking place,” Sweeney told MPA. “A lot of people are shocked to find out that this is even something that can be sold,” she said of the sale of consumers’ financial data by the credit agencies.

Brendan McKay, president of advocacy at AIME, said the practice of trigger leads had gone too far. “The companies that practice trigger leads as part of their business practices have just pushed it too far,” he said in a previous interview.

McKay said many of those companies utilizing trigger leads were deceptive in the practices, sometimes sending messages made to look as if they are working with the loan officer with which the officer has been dealing. “It’s gone too far,” McKay said.

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