Written By: Karen Deis
It all starts when you pull an in-file credit report!
And, it’s legal because the Fair Credit Reporting Act allows credit bureaus to sell pre-screened credit profiles to anyone who wants to pay the tens-of-thousands of dollars to buy them.
Inquiries that show up when you pull a report qualify as “pre-screened” criteria.
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Recently, I received frantic calls from loan originators whose pipelines are shrinking because clients were canceling loans and going with another lender. The clients are receiving letters and telephone calls (if they are not on the Do-Not-Call list) from your competitors, with a sales pitch (from your competitors) that they can give them a better deal on their mortgage.
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That brings up an interesting question! If the trigger lead is sold, and the other mortgage company pulls a credit report, is the trigger lead then sold again? Just think about it...this could be an endless process.
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How do they know? Because you show up as the mortgage company who pulled the in-file!
You are feeding business to your competition.
The National Association of Mortgage Brokers has recently identified this as a problem (even though we reported on this issue several years ago (Keep Your Hands Off of My Client!).
And at the 2006 annual convention, the National Association of Realtors® also identified trigger leads as one of the top problems in their business today. Why? Agents are losing deals because clients are switching lenders in mid-stream and missing the closing dates. Other deals are "on hold” for the same reasons. Another issue is that their clients are accusing them (the real estate agent) of selling their personal information, when in fact, they have nothing to do with it. Some real estate agents are making it a standard practice to have prospects and clients opt-out BEFORE they recommend them to a mortgage company. As a loan officer, you need to make agents aware of what’s happening to them, too.
I believe until either state laws are passed prohibiting this practice, or the FCRA provision is changed—that you need to take matters into your own hands and be proactive with your prospects, past clients and real estate agents.
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As a subscriber—we’ve done the work for you. We have created a client and real estate agent flyer with the Frequently Asked Questions (FAQ) on exactly how to opt-out, the different options, how to get on the Do-Not-Call list, how to stop junk mail and much more—all in one place.
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In fact, we recommend that you review this with your entire staff as it contains info that they may not even know about. Opt-Out yourself and learn how it works and what your clients go thru, too.
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In addition to the flyer, download to a CD and create a label with your contact info. Here are some suggestions on how to use this flyer and websites you can visit for more information on the topic.
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