Mortgage triggering is the process that some lenders use to gain customers.
If you are a mortgage lender and haven’t experienced it yet, lucky you.
Basically, lenders purchase these ‘trigger leads’ from the bureaus or other companies.
When a lender pulls credit as part of the mortgage lending services package to begin the loan process, it sets off a "trigger". If the consumer's information hits within the credit score, geographical perimeters, and LTV ratios set up in advance, lenders who buy these leads are notified. The lenders then 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 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.
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.