Data Facts Blog


Mortgage Triggering; Who is calling my customers?

Mortgage triggering is a frustrating, pull-your-hair out phenomenon that rears its ugly head frequently during a refinance boom. If you are a mortgage lender and haven’t experienced it yet, lucky you.

Mortgage triggering is the process that some lenders use to gain customers.

Basically, lenders purchase these ‘trigger leads’ from the bureaus or other companies. The leads are consumers who have recently had their credit pulled in order to qualify to buy a home. Once purchased, the lenders call these consumers, (who could be YOUR customers) and extend them a firm offer of credit.
This process is covered by the FCRA as a legal practice. (FCRA, 15 U.S.C 1681). The wording of the language is: ‘to obtain a consumer’s private information an institution must have consent OR present a firm offer of credit in their solicitation’. So, when lenders buy these leads, they must call, email, or mail a firm offer of credit to the consumer.
The argument for triggering is that is gives consumers a choice. Triggering offers consumers more than one option for a mortgage loan.
The argument against triggering is that unscrupulous loan officers may make ‘too good to be true’ statements, or run a bait and switch scheme using the consumers’ information.
Through the years, Data Facts has answered this question many times. Customers are confused and frustrated by the sometimes multiple phone calls they receive from competing lenders. They feel their private information has been sold. And it has.

How customers are triggered: lenders set up their criteria based on the credit score, LTV ratio of the loan, and even the geographic area of consumers they wish to target. Once set up, the consumers that fit these criteria are monitored by the triggering company. When a consumer that is on this list has their credit pulled for a mortgage loan, this triggers in the system. The lender then receives this information, and calls the consumer with an offer.
How to guard against it:
1: Educate your customers. Warn them that they may receive calls with competing offers, and they may be ‘too good to be true.’ Simply knowing to expect the calls from other lenders will decrease the frustration most consumers feel about this practice.
2. Tell your customer to opt out. If a consumer opts out of prescreened offers, this will stop the trigger leads. They can opt out at http://www.optoutprescreen.com. The catch; this process takes 5 days to take effect, so if their credit has already been pulled, this will not block the offers immediately.
3. Advise your customer to get on the do not call list. All trigger leads are supposed to be scrubbed against the do not call list. Consumers can add their name to the list by calling 1-888-382-1222 from the phone they wish to register, or register their number at http://www.donotcall.gov. Again, this takes a few days to take effect.

There is no sure fire way to protect your customers from receiving these trigger calls. However, if you arm them with the pertinent information, you can minimize the possibility of losing a customer to your competitors.

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Social Security Numbers; Times are A Changin’

Posted in Identity Theft,Uncategorized by datafactssolutions on September 12, 2011
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Social security numbers began being assigned in 1936 to track workers’ earnings so that proper benefits could be paid. These 9 digit numbers were created from a specific formula. This year, that formula is changing.
Social security numbers have always been comprised of 3 number sections; the 3 digit area number, followed by the 2 digit group number, and then a 4 digit serial number. The area number reflects the state in which the card was issued.
This sequence creation has begun to pose some problems.
1: Because the first 3 numbers indicate the state the number was issued (look at this chart to see the numbers by state), this limits the numbers of each state. Highly populated states may eventually run out of 9 digit numbers.
2: The SSN has been widely used for identification purposes for schools, businesses, etc. The current design allows identity thieves more of an opportunity to figure out a person’s number, and use it for fraudulent activities.
As a result, the Social Security Administration has decided to change the way SSN’s are assigned.
As of June 25, 2011, Social Security Numbers will be randomized.

The key differences will be;
The geographical significance of the first 3 numbers will be eliminated. The ‘area numbers’ will no longer be allocated from a specific state. This will extend the longevity of the 9 digit number system.
Previously unassigned area numbers will be introduced. Prior to June 25, 2011, social security numbers would have never included an area number above 772. Now the Social Security Administration allows for area numbers all the way into the 800’s. However, there are some area numbers that will never be allocated; 000, 666, and 900-999.
Never fear! You are not going to be reassigned a social security number or anything like that, this is simply for the people who receive Social Security numbers after June 25, 2011. AND the 9 digit design will remain in place.
Always remember: your social security number is a goldmine for identity thieves. Do not divulge your social security number unless absolutely necessary, and never carry your card in your wallet.

Credit Scores and Why You May Not Have One

Posted in Credit Score,FICO,Uncategorized by datafactssolutions on September 2, 2011
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So, you want to buy a house, car, boat, or some other item that requires monthly payments. One of the first actions a lender will take will be to pull your credit report and look at your FICO credit score. Your approval and terms of the loan depend heavily on these numbers.

What if you don’t have a credit score?!?

Not having a credit score is not the end of the world, and about 50 million people fall into this category.  There are several reasons why you may not have one.

  1. You are young. Jennifer just graduated from college. She has no credit cards and her car loan is in her parents’ name. She does not have a credit file, so she has no credit score.
  2. You have always paid in cash. David subscribes to the policy that if you cannot pay for it, you don’t need it. He has always paid cash for his cars, he rents an apartment, and he doesn’t use credit cards. The bureaus would have no record of David, and he would not have a credit score.
  3. You paid off all your loans last year. This is frustrating but true. If you have paid off your car, house, and credit cards and live a life of no debt (sigh, you are so fortunate), then your credit report would not be updated with any new information. Because of this, you may no longer have a credit score.
  4. You are dead. Ok, I added this one to see if you were paying attention. However, sometimes a creditor will report you as deceased, and this wipes out your credit score. This can happen in situations where a person is an authorized user, or co-borrower with another person, and the other person on the account dies. The creditor may report to the bureaus that the owner of the account is deceased. As a result, you would show as deceased, and you would not have a credit score.

If you are one of the millions of people who do not have a credit score, there are steps you can take to build your credit file which will generate a score.

Open a credit card. This is a great way to begin building your credit. By opening a credit card and using it monthly, the creditor will report this usage to the bureaus. They will start a credit file on you and collect your payment habits. After about 6 months, there will be enough information available to generate a credit score for you.

Be an authorized user.  Your parents, spouse, siblings, or friends can add you to one or more of their accounts as an authorized user.  This allows you to take advantage of the credit history that they have built up on the account. An authorized user status will help generate a credit score faster than opening a credit card on your own. HOWEVER; make sure that the account is in good standing (no late pays, balance is low), or the resulting credit score will not be great.

Break out the unused credit cards. If you are debt-free, you can still use your credit cards every month or so and pay the balance off at the end of the month. In order to have a credit score, you must have one credit line that has updated within the last 6 months. This works even if you pay off the balance every month. So, charging dinner or a tank of gas every now and then will keep your score active and alive.

Go nationwide. Small community banks and credit unions may not report to all 3 credit bureaus. If you already have credit, do a little research on your creditors to see if they report to the bureaus.  If not, then your credit line with them is not helping to build your credit score.

Check your credit. Pull your credit report at www.annualcreditreport.com to see what is showing up on your report, and if there are any errors. If an item is reporting incorrectly, or you are showing as deceased, get that corrected immediately.

Making sure you have a credit score takes a little effort. However, by taking these actions into consideration and implementing them into your financial life, you will be on your way to a great credit score!