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.”

Back On Track: The Housing Market Is Changing For The Better

The housing market is improving much faster than anyone would have expected a year ago. Nationally, the prices of homes increased by 10% since February of 2012. However, many in the industry think that this may be cause for concern. They are nervous that the fast pace of recovery will cause another bubble.

Housing prices have remained positive throughout the seasonally slow winter months. “Home prices ended the first quarter of 2013 in a similar fashion to how they started the year, stable and in positive territory,” said Dr. Alex Villacorta, director of research and analytics at Clear Capital. “It has been seven years since home price growth continued throughout winter. This is very strong evidence of the start to a new leg of the recovery, one that should give further confidence to consumers and lenders alike that the recovery is real. As buyers become more confident the recovery is sustainable, this sentiment should grow to create a positive feedback loop.” It even appears that prices will still go higher. Here are a few reasons this may be the case:

• The inventory of homes available for sale has fallen to the lowest amount in 20 years.
• Since 2008, Homebuilders are not adding as many newly constructed homes to the market. Rising costs of building materials and labor are causing builder confidence to be low. “Many builders are expressing frustration over being unable to respond to the rising demand for new homes due to difficulties in obtaining construction credit, overly restrictive mortgage lending rules and construction costs that are increasing at a faster pace than appraised values,” said Rick Judson, NAHB chairman and a home builder from Charlotte, N.C. “While sales conditions are generally improving, these challenges are holding back new building and job creation.”
• Banks are selling fewer foreclosures. “Although the overall national foreclosure trend continues to head lower, late-blooming foreclosures are bolting higher in some local markets where aggressive foreclosure prevention efforts in previous years are wearing off,” said Daren Blomquist, vice president at RealtyTrac. “Meanwhile, more recent foreclosure prevention efforts in other states have drastically increased the average time to foreclose, which could result in a similar outbreak of delayed foreclosures down the road in those states.”
• Investors have purchased many available homes, converting them to rental properties.
• Borrowers aren’t willing or able to sell at such low prices.
• Tighter Lending standards mean that sellers are afraid they will not qualify for a new loan.
• Demand has increased dramatically due to first-time homebuyers. Rising rents and falling interest rates make monthly payments less than what it costs to rent. Also, the demand is currently higher than the available supply.
  Low interest rates allowing qualified buyers to borrow more money. Today’s historically low interest rates have given American homeowners a significant boost to their purchasing power. In the pre-bubble period from 1985 through 1999, when rates for a 30-year fixed mortgage ranged between six percent and 13 percent, Americans spent 19.9 percent of their median monthly incomes, on average, on mortgage payments for a typical, median-priced home, according to Zillow. At the end of the fourth quarter of 2012, with mortgage rates in the 3 to 4 percent range, U.S. homeowners paid 12.6 percent of their monthly income on mortgage payments, down 36.9 percent from historic, pre-bubble norms, according to Zillow.

Prices may be rising quickly but tight credit standards are keeping everything in check. The housing market is healing but could potentially be in for more instability until more people purchase homes in which they want to live.

~~Stacie Shelton is a member of the Marketing Team at 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.

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.