Here at summer’s end in 2022 things have gotten a bit crazy in the mortgage business. One of the ways that things have gone off the rails is the absolute desperation that some companies have to stay in business using a tactic that is equal parts big data, lousy business practices and general ignorance. They are called trigger leads and they are a hassle to consumers and local mortgage loan originators alike.
I got an upfront view of this with a borrower of mine last week. The situation unfolded as follows, but it’s pretty representative of what is happening out there generally. I spoke with a client about their changing financial situation last Monday. After a discussion of their goals and the math it made sense to them to refinance (rare, I know). So on Tuesday we hit the ground running on their loan process. This meant my team pulling their credit report at some point on Tuesday, and got about the business of setting up the loan and the secure document portal etc. So there were a few back and forth calls and emails from us to them as standard procedure.
Late in the day on Tuesday she sent me an email that said that her cell phone had been inundated with calls, texts and emails from lenders. Some even represented that they were affiliated with my company and calling her to “gather data”. However, she was aware enough that she had already given my team the same information earlier in the day so she did not go deep with them. Good for her to recognize this. But the calls kept coming. By the end of the week she was contacted by 37 different lenders, by her count. In FOUR days!
TransUnion, Equifax and Experian are often mistakenly perceived by consumers to be the companies that are the gatekeepers of your credit. They are not. They are data warehouses that have more information on you than you can imagine. And they sell it! That is how they make money! I was asked by this borrower last week “why would you sell my information?”. Believe me, shooting myself in the foot by selling your data to 37 other lenders is not on my list of things to do.
And here is where ignorance, in the truest definition being lack of knowledge, comes into play. If you as a consumer have ever given your cell phone number or email out to complete a warranty card, an internet newsletter signup with a bigger company you are interested in or even a facebook astrology quiz you may have given the trigger info out yourself. This is because each credit bureau has a file on you that is far thicker than the data I have for your mortgage. This file has your cell phone and email and even if I delete them from my software before pulling your credit report!
Mortgage Lenders are also under stress. The fact is that we are doing, as an industry, about a third of the business we did last year. We were in hyper growth mode during the pandemic and many people jumped into the industry to help folks refinance and buy houses when rates were low and the market was smoking hot. In six months as rates have been rising, lenders are desperately looking to boost volumes and keep their doors open. So they buy these trigger leads and they sic the marginally trained, very inexperienced call center employees onto unsuspecting consumers. They tell them internally, that you are calling to offer a lower cost deal and save the borrower from getting taken advantage of financially.
I know this personally. I got hit by 2-3 calls from trigger lead lenders when I refinanced my own home a couple of years ago. I literally told them “I work here and am getting an employee deal.” I was told I should not trust my lender and should get a second opinion from them. I’m like “DUDE, I work here and if I can’t trust them for a good deal, I probably wouldn’t work here. But it didn’t stop them from pitching, several times!
Now if you are working with a local lender like me, you know that reputation is everything. You can’t generate a business based on word of mouth from borrowers, realtors, financial advisors etc. and take advantage of people. So the consumer is not usually getting an unfair deal and the whole exercise is a nuisance to the borrower and the local lender and a lot of burned energy on the trigger lead company. They only convert a minimum of borrowers from these call centers, but they feel like they are “doing something”. The only benefactor in this situation are the credit bureaus who continue to print money selling your data no matter who you get your mortgage from.
So aside from entering your data at optoutprescreen.com about 5 days before you start your pre approval, there is not much you can do. But your friendly neighborhood mortgage loan originator is not the culprit in the sale of your data.
