How-to Monday: "Trigger leads"
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Applying for a mortgage? Don't be surprised if you get calls, emails or letters from competitors hoping to steal you away from the company you picked.
When your loan officer requests a copy of your credit report, the credit bureau can -- and often does -- sell that information to firms looking for would-be borrowers. People in the biz call it a "trigger lead."
Don't think that's died down as lenders have tightened their guidelines. A few months ago, Hunter Bloch was bombarded by calls after applying for a home equity line of credit with his bank. "It was at least 10 a day," said Bloch, who happens to be a mortgage broker. (He's vice president of Annapolis First Mortgage LLC in Hanover.)
Good or bad?
Proponents argue that consumers win because they could find a better deal. (The Federal Trade Commission, in this consumer alert, says the upside is that "prescreened offers can highlight other available products and make it easier to compare costs.")
Others -- including local mortgage brokers, who stand to lose business as a result -- say the offers can be disingenuous and are sometimes outright bait-and-switch.
Eric Gates, president of Apex Home Loans Inc., a brokerage in Bethesda, says to be aware that the callers might misrepresent themselves. "Like, 'I was asked to call you; we're going to handle your application from here,'" he said. "I know of a couple clients that were offered terms that were never delivered," Gates added.
If you like the idea of competing mortgage companies coming to you -- and can separate the shady offers from the real deals -- then you don't need to worry about trigger-lead calls. If you'd rather be left the heck alone, the FTC suggests these options:
1. Get on the National Do Not Call Registry, if you haven't already done so. You can put your number on the list at donotcall.gov or by calling 888-382-1222. Bloch, president of the Maryland Association of Mortgage Brokers, wasn't on the list when the calls came surging in -- but he is now. Still, it won't shield you from companies you already have a "business relationship" with -- or from law-breakers. Gates knows of people who got "inundated" despite being on the list.
2. Opt out of receiving prescreened offers by calling 888-5-OPTOUT (888-567-8688) or going to optoutprescreen.com. You'll have to provide your Social Security number, so make sure the site security is working, the FTC says -- check for the lock icon on your browser or the "https" at the start of the web address.
Part of what bugs Gates about trigger leads is that angry customers invariably think the original mortgage provider is to blame. "They think we're the ones who sold their information," he says.