You may have heard complaints from your borrowers about dozens of confusing and misleading calls they received after applying for their mortgage. Borrowers may believe that your company sold their data, damaging trust. In the worst case, a borrower may even choose to switch to a lender that called promising a better deal.
These calls stem from trigger leads. When you pull credit during a mortgage application, the credit bureau will sell that information as a lead to third parties, including other lenders. The high volume of calls to your borrower that follows is both a nuisance and a threat to the loan officer-borrower relationship.
“We have situations right now where you’re proactively warning your client that it’s going to happen, so that they at least have a heads up,” said Brendan McKay, chief advocacy officer for the Broker Action Coalition. “If you don’t, a lot of the time the borrower thinks that their loan officer sold their information. They don’t know any better — the loan officer did something, and then this happens. They don’t know all the stuff that’s happening in between.”
Representatives from both the broker and banker channels were in Washington, D.C., this spring, pushing for restrictions on trigger leads. While brokers have been advocating for this change for years, banks have more recently voiced support.
“A more competitive market has made people pay notice more,” said Bill Killmer, senior vice president for legislative and political affairs at the Mortgage Bankers Association. “It’s astonishing, we’ve got anecdote after anecdote of how quickly people are inundated with calls and texts … I think it’s been more disruptive and more prevalent.”
McKay echoed this sentiment, adding that trigger leads use a call center model that has scaled up with newer technology. He said not much data is available on trigger leads because it is held by the credit bureaus, who are unwilling to share it for “sad but obvious reasons.” But as originations fell over the past two years, trigger leads became much more visible.
With both banks and nonbanks now invested in the issue, Killmer and the MBA set out to find a more “market-friendly way to curb the practice” than a total ban. The aim: to preserve valuable existing customer relationships while ending the “abusive” use of trigger leads.
The Homebuyers Privacy Protection Act of 2024 was introduced in February. If passed, the act would change the trigger lead system from the current opt-out format to be opt-in on the consumer end, Killmer said.
The legislation allows companies who have originated, serviced or held a deposit account for a loan to contact that client via future trigger leads — but only with the client’s consent.
“We figure that will take care of most of the nuisance outreach, because there’s going to be at least an acknowledgement from the customer with that consent, that they could be contacted,” Killmer said. “And they do have a relationship with either the depository or nonbank that would be contacting them, under the terms of the legislation.”
“It’s as good a position as any trigger lead legislation has ever been, by a wide margin. We’re not over the finish line, but I’m cautiously optimistic… we’re in a really good spot.”
Brandon McKay, chief advocacy officer, Broker Action Coalition
Both Killmer and McKay said they’re feeling very positive about the direction of this legislation. As of the end of May, it was in the House Financial Services Committee and had strong, remarkably bipartisan support from members of both the House and Senate. A strong indicator of this bill’s viability is the significant number of on-committee cosponsors, said McKay.
“It’s as good a position as any trigger lead legislation has ever been, by a wide margin,” McKay said. “We’re not over the finish line, but I’m cautiously optimistic… we’re in a really good spot.”
It also has a diverse coalition of organizations supporting it, Killmer said, with both consumer advocates and a mix of financial services and housing trade groups lobbying for it.
“It’s something I think all of us can get behind to make the consumer experience more favorable,” Killmer said.
If the bill successfully goes through markup — changes made in committee — and leaves the committee for a vote in the greater House, McKay said it could either be voted on as an independent bill or may be added into a larger package of bills. Either way, support is already being gathered on the other side of the Capitol, and Killmer said more than 30 senators are already on board.
Both the coalition and MBA are working hard to make plenty of other changes in Washington, too. McKay is in conversation with Fannie Mae, the Consumer Financial Protection Bureau and the Department of Veterans Affairs, encouraging broker-friendly guidelines and policies. Killmer is working on several housing affordability initiatives as well as favorable tax laws for both businesses and homeowners.
Congressional support is still being gathered, and McKay said the easiest and most impactful thing brokers, loan officers and other supporters can do is reach out to their legislators. Both the Broker Action Coalition and the MBA’s Mortgage Action Alliance have links on their websites where supporters can reach out to their local representatives with just a couple of clicks.
“We’ve put out 65,000 letters in the last 12 months,” McKay said. “They are so impactful. You may feel like you’re just sending an email off into the abyss, and you are not… somebody is going to read it, and put it on a spreadsheet and bring it to the boss. It’s a really big deal.”
