You’ve probably never heard of a “mortgage trigger lead.” But as a consumer, you might be shocked to learn that in an era of massive data breaches and hacks — witness the Equifax debacle — they even exist.
So what’s a trigger lead?
When you apply for a home mortgage or a preapproval, the loan officer pulls information about you from the national credit bureaus. One or more of the bureaus then convert the fact that you are shopping for a mortgage into a commercial product — a trigger lead — for immediate sale to competing lenders. This allows those competitors to contact you and solicit your business before you get locked in to the lender to whom you’ve applied.
Trigger leads are created and sold super fast, often within 24 hours of your loan application. Out of the blue, your phone might ring and suddenly you’re the target of a pitch from a competitor offering a deal that may be real, deceptive or no better than the one you’ve already been quoted.
Enough of these lead-driven offers are deceptive that an industry group, the National Association of Mortgage Brokers, last week began pushing a campaign on Capitol Hill for an outright ban. John G. Stevens, president of the association, which represents midsize and small mortgage companies, told me that trigger leads sold by the national credit bureaus inevitably “expose borrowers to identity theft,” disrupt ongoing mortgage transactions and open the door to a wide range of “unscrupulous” come-ons.
Consumers “don’t know who they’re really talking to,” Stevens said. “They don’t know whether to believe” what the caller is offering them, and they frequently are misled. To illustrate the problem, Meridian Home Mortgage, a Maryland lender, recently posted a recording of…