The National Association of Mortgage Brokers (NAMB) wrote to Congress on Wednesday seeking a ban on the sale of trigger leads for mortgages through the PROTECT Act of 2017, which was passed after a credit bureau data leak affecting more than 143 million Americans.
A trigger mortgage lead is generated when a lender pulls a copy of a customer’s credit report following an inquiry by the customer for a new mortgage or refinancing.
The credit bureau generating this report then makes the individual’s details such as names, contact information, and other significant personal information available for sale to other mortgage loan officers for a specified time. Mortgage brokers are unable to prevent credit reporting agencies from including their borrowers' personal information on the trigger lead lists they sell at present.
“The credit bureaus compile trigger lists daily and sell them to numerous buyers across the U.S., including so-called ‘lead generators,’ who then resell the list to even more companies,” said John G. Stevens, President of NAMB.
According to NAMB, these leads not only threaten consumer privacy but also pose dangers in many other ways. “They expose borrowers to identity theft and increase the risk of compromising borrowers’ financial passwords. They also increase the borrower’s exposure to potentially unfair and deceptive activity by unscrupulous mortgage originators looking to impinge on another mortgage professional’s client.”
The recent data leaks from credit bureaus, however, have spurred credit bureaus to work together to create a website that accepts and processes requests from consumers to opt-in or opt-out of offers of credit, mortgage, or insurance generated through these leads.
“Contacting consumers for the express purpose of encroaching on an in-process transaction can be harmful and confusing during the complex process of obtaining a mortgage,” Stevens explained. “Unfortunately, there are people who use all kinds of unethical tactics to target borrowers who have initiated the process of obtaining a mortgage.”