Senators Introduce Latest Bill to Restrict Mortgage Trigger Leads
Written By: Joel Palmer, Op-Ed Writer
The latest effort to eliminate mortgage trigger leads was introduced by a pair of U.S. senators last week.
Senator Bill Hagerty (R-TN) and Senator Jack Reed (D-RI) introduced the Homebuyers' Privacy Protection Act (S.3502) in the U.S. Senate.
The bill would amend the Fair Credit Reporting Act to prevent consumer reporting agencies from furnishing consumer reports derived from mortgage applications unless the recipient of that report has an existing relationship with the borrower.
“A mortgage application should not be public information,” said Rebeca Romero Rainey, President and CEO of the Independent Community Bankers of America.
Trigger leads occur when credit bureaus sell a potential borrower’s information after a credit application “triggers” a credit report pull. The credit bureaus can sell the lead to data brokers and other lenders without the consumer’s knowledge or approval.
One broker found marketing leads online said new leads are provided each business day, ensuring that they are prospective homeowners who had their credit checked a day before the lead is provided. The broker added that leads are scrubbed against the DNC (Do Not Call) list to ensure compliance with federal and state telemarketing laws.
In the past, this type of lead has been spun as a positive to consumers, as they can potentially receive more competitive offers when seeking credit, especially mortgages.
There are also proponents of trigger leads who have expressed concern that legislation to restrict their use would negatively affect lender’s ability to market their products and services, especially smaller institutions.
However, according to those trying to halt the practice, trigger leads instead cause borrowers to be inundated with aggressive marketing pitches, including unsolicited calls, texts, and mailings.
What’s more, recipients of trigger leads have reportedly misrepresented themselves to borrowers by suggesting they are underwriters for the borrower’s chosen lender, or that they are represent a government agency. This puts buyers at risk of giving personal information to unscrupulous callers.
“Many reputable mortgage companies…support curtailing trigger leads since prospective home buyers often blame their lender for selling off their personal information even though it is the credit bureaus that are providing this information,” said Sen. Reed during his statement upon introducing the bill.
“The current system leaves consumers without control of their personal information when they apply for a mortgage…The Homebuyers Privacy Protection Act will go a long way towards securing consumer’s personal information and will provide much needed relief from the seemingly never-ending solicitations prospective homebuyers receive during an already stressful time,” Reed added.
Members of Congress and mortgage industry leaders have spent the past few years attempting to eliminate trigger leads.
"NAMB and its members have been working on this issue for the past three congresses,” said Valerie Saunders, President of the National Association of Mortgage Brokers. We are encouraged by the expanded interest in this issue by Senators Reed and Hagerty as well as members of the House of Representatives.”
Last year, Rep. Ritchie Torres (D-NY) introduced the Trigger Leads Abatement Act. In April 2023, he reintroduced the bill. Two months later, Rep. John Rose(R-TN) introduced the Protecting Consumers from Abusive Mortgage Leads Act. There has been no movement on either bill since they were introduced and referred to the House Financial Services Committee.
About the Author
As an NAMU® Opinion Editorial Contributor, Joel Palmer is a freelance writer who spent 10 years as a business and financial reporter and another 10 years in marketing for the insurance and financial services industries. He regularly writes about the mortgage industry, as well as residential and commercial real estate, investments, and retirement income planning. He has also ghostwritten books on starting a business, marketing, and retirement income planning.
