Mortgage Triggering: Who is contacting my customer?

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 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. Your name may have already been sent out on a list that hasn’t mailed yet, so you may still receive items some time after you have opted out.

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 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.

~~Stacie Shelton is a member of the Marketing Team at Data Facts, Inc. Since 1989, Data Facts has provided information you trust and rely on to make sound business decisions. Our CEO, Daphne Large is the 2013 NCRA President and our EVP, Julie Wink is the Co-Chair NCRA Education and Compliance Committee. We provide information for a broad variety of business needs, such as background screening for employment, tenant screening for residential firms, and up-to-date financial background data for mortgage companies. Our top of the line technology delivers information quickly, accurately and securely. For more information about Data Facts visit www.datafacts.com. Follow us on Twitter @dflending and Facebook at “Data Facts Lending Solutions.”

April is Financial Literacy Month: Numbers and Websites You Should Know

In the spirit of Financial Literacy Month, Data Facts has compiled a list of very important numbers and websites for consumers.

Ta-Da!

To obtain a credit report:

www.annualcreditreport.com This site allows you to request a free credit report from all 3 bureaus once every 12 months. Call 1-877-322-8228 to order the report by phone.

To get on the Do Not Call List:

 Call 888-382-1222 from the phone you wish to register, or go to www.donotcall.gov . Due to the Do Not Call Improvement Act of 2007, phones that are registered will remain on the list permanently (previously it expired after 5 years).

To opt out of mail solicitation and pre-screened offers:

 Call 1–888–567–8688  or visit  www.optoutprescreen.com . You are able to opt out electronically for 5 years. To opt out permanently, you will need to print out the form and mail it in.

To contact the Credit Bureaus:

Equifax: Call 800-685-1111 or visit them online at www.equifax.com
Experian: Call 888-397-3742 or www.experian.com 
Transunion: You can reach them at 800-888-4213 or www.transunion.com  

To create a letter disputing errors on your credit report:

Under the FCRA, both the credit reporting company and the information provider  are responsible for correcting inaccurate or incomplete information in your report. To take advantage of all your rights under this law, contact the credit reporting company and the information provider. Visit http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre21.shtm for a sample dispute letter.

Other important numbers to have on hand:

• Your insurance agent
• Your health insurer
• Your bank’s main AND local branch
• Your brokerage house
• All of your credit card issuers

Utilize these websites and numbers to make sure you welcome the month of May prepared and in top financial condition!

~~Susan McCullah is the Product Development Director for Data Facts, a 23 year old Memphis-based company.  Data Facts provides mortgage product and banking solutions to lenders nationwide. Check our our website for a complete explanation of our services.