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Trigger Happy: Credit Bureaus, Lenders and Your Data

From the ashes of the massive Equifax data breach of 148,000 million consumers and the Trump administration ongoing attempts to weaken or gut the Consumer Financial Protection Bureau and Dodd Frank, rises the “Trigger Lead” —your mortgage inquiry sold to the highest bidder in the shortest amount of time— to tempt you with better (or worse) mortgage terms before you commit to the lender you have chosen.

According to real estate columnist Kenneth Harney, in a recent column, you have scarcely 24 hours of privacy before the calls come rolling in to attempt to woo you away from the lender before you lock in.   The National Association of Mortgage Brokers is currently lobbying Capitol Hill for a ban on these practices.  I’m not sure I am optimistic in an age where regulations protecting consumers from predatory lending practices  (Dodd Frank) are currently in the throes of repeal.

 

I am not against shopping around for mortgage rates and terms and I expect most buyers do—on their own.  As Realtors, we have many lenders that we can recommend and encourage all of our clients to check rates, programs and terms of all lenders before committing to one.

What I am opposed to is the credit bureaus making money by selling leads to unscrupulous lenders and third-party brokers that expose you to identity theft and other risks by duping you into making an application you are not aware of or being purposely vague or misleading and interjecting themselves into a mortgage already in process.  Credit bureaus have our most personal and closely regarded information, do not protect it adequately and sell it for profit without our permission or consent.  If you purchased Life Lock as millions did after the breach, guess who is monitoring your credit information and protecting you from identity theft:  Equifax.

Here is an actual trigger call that Meridian Home Mortgage Corp posted on their blog to illustrate the problem

I contacted Dan Hartman of Province Mortgage who we work with on a regular basis and asked him to weigh in on the trigger lead problem.  He has two remedies to offer, in general he tries to minimize the data he provides to the credit bureaus when completing the loan disclosures and specifically,  he does not put a valid phone number in the “home phone” section of the application and adds it somewhere else in a field not provided to the credit bureau.  To avoid the sale of your information to a trigger lead program and to avoid further commercialization of your information,  Dan recommends you opt out here