Stopping Trigger Leads - How Mortgage Loan Applications Result in Trigger Leads
How Credit Bureaus Exploit Borrowers Through Trigger Leads
Don't be caught off guard by unwittingly becoming a trigger lead. Everybody seems to regret it.
Say you decide to buy a home and get a mortgage. So, you call a mortgage broker recommended to you by your Realtor, a family member or a friend. Maybe this is a reputable mortgage lender with whom you've done business in the past. You complete a loan application and receive a letter of preapproval.
Then, out of the clear blue, a different mortgage lender calls you.
The lender might say they are affiliated with a credit bureau or give some other red-flag reason for calling. Your suspicions are aroused. You wonder, how did they know you were getting a mortgage and why are they calling you?
When you apply for a loan, your mortgage professional pulls a copy of your credit report. This triggers an inquiry. The credit bureau then turns around and sells your name to other mortgage companies. It's not against the law for credit bureaus to sell your information to third-party vendors. This is called a trigger lead.
Stopping Trigger Leads
You're about to enter into one of the biggest transactions of your life, and the last thing you need is a loan rep calling you and offering up phony interest rates. Deal with a trusted professional, not some telemarketer. Don't ever buy anything over the phone.
Here are three ways to stop trigger lead harassment:
- Put your name and phone number on the National Do Not Call Registry. You can register your cell phone number as well. Do this at least a month before you apply for a loan because it takes 31 days to become effective. Make a note to re-register every five years because the order expires at the end of five years.
- To prevent mortgage lenders from sending you direct mail, you will need to register with the Direct Mail Association. Whether you register online or through mail, it will cost you $1.00, which can be charged to your credit card. Register early because the DMA distributes its lists quarterly, so it could take a while to become effective. This registration is good for five years.
- Sign up for OptOutPrescreen. This will stop the four credit bureaus from selling your name as a trigger lead. They are: Equifax, Experian, Innovis and TransUnion. The Fair Credit Reporting Act allows the sale of your name, but opting out puts a stop to trigger leads for five years.
Lenders tell me that by opting out, you can add 10 to 15 points to your credit score! For permanent restraint, you will need to mail in your registration, which is also available on the OptOut Web site.
You might also your mortgage lender how you can prevent your name from becoming a trigger lead. Some mortgage lenders can give you a document disallowing the sale of your personal information, that you can sign at the time you receive the mortgage as well. Because the sale of your personal information can continue after the mortgage has been funded and closed. Who knows, you might be a targeted candidate for a mortgage refinance?
This is one of the reasons my husband and I hold title on the deed to our home and mortgage as wife and husband instead of husband and wife. Apart from bucking tradition and making things a little bit more difficult for those running the status quo, it assures that all mail is addressed to me.
And I make sure none of it reaches my husband to irritate him. Nobody likes to be a trigger lead and marketed to like a commodity, but it's the wave of the future. The best we can do is try to minimize the effects.
At the time of writing, Elizabeth Weintraub, CalBRE #00697006, is a Broker-Associate at Lyon Real Estate in Sacramento, California.