Trigger leads restrictions rewrite mortgage outreach rules

"A trigger lead occurs when a lender pulls a borrower's credit report during a mortgage application. Credit bureaus then sell that information to other lenders, who may contact the borrower with competing loan offers. The practice often results in a surge of unsolicited calls, texts and emails shortly after an application is submitted."

"Consumer reporting agencies generally cannot sell trigger leads unless the borrower has given explicit consent or the institution already has a qualifying relationship with the consumer, such as an existing mortgage or bank account. Outside of those narrow exceptions, the sale and use of trigger leads is prohibited."

"Brendan McKay, broker and owner of McKay Mortgage Co. and the co-founder and CEO of BAC, said it's important to remember the law doesn't ban companies from using trigger leads—rather, it limits the credit bureaus from selling them."

A federal law restricting trigger leads took effect March 5, supported by mortgage industry groups and consumer advocates including the Mortgage Bankers Association and Broker Action Coalition. Trigger leads occur when lenders pull credit reports during mortgage applications, and credit bureaus sell this information to competing lenders who contact borrowers with offers, resulting in unwanted calls, texts, and emails. The new law establishes a national standard, building on restrictions already enacted by ten states. Credit bureaus cannot sell trigger leads unless borrowers explicitly consent or the institution has an established financial relationship with the consumer. Limited exceptions allow contact from existing banks or mortgage servicers, or from consumers who affirmatively opt into prescreened offers. The law restricts credit bureau sales rather than prohibiting companies from using trigger leads entirely.

Read at www.housingwire.com