Moves to eradicate 'anti-consumer' practice to intensify in 2025, Nabors suggests
Moves to curb the use of trigger leads within the mortgage industry will resume in 2025 despite being dealt a blow last week, according to National Association of Mortgage Brokers (NAMB) president Jim Nabors (pictured).
While a ban on the practice – in which credit bureaus sell leads to lenders and other companies when a consumer applies for a mortgage – was set for inclusion the National Defense Authorization Act (NDAA) for 2025, it was stripped from a new version towards the end of last week.
But Nabors said NAMB, which was influential in bringing the issue to the attention of Congress in 2023 through Representative Ritchie Torres (D-NY), would resume efforts to revive the “pro-consumer” bill in January.
“Along with the Mortgage Bankers Association [MBA] and every other association that’s interested in putting an end to this anti-consumer practice, NAMB is happy to work with anyone,” he told Mortgage Professional America. “It doesn’t matter how big or small they are because, to me, this is not a mortgage broker or mortgage banker issue. This is a consumer issue, and it benefits everyone.”
The association is already working behind the scenes for a fresh effort to get the issue before Congress at the turn of the year – and Nabors highlighted that removing the practice was a pressing matter throughout the mortgage industry, as well as for consumers.
“[Brokers] want to learn how to develop their own referral sources and develop business, but for a few people it’s just a case of buying somebody else’s leads and seeing what they can siphon off,” he said.
“We want to help those people learn how to originate loans, how to use social media, how to develop referral sources so that they’ll see the advantages of that over just buying a bunch of leads.”
Amir Nurani, broker-owner at Left Coast Leaders, predicts a mass exodus of part-time realtors as reduced commissions make it harder to sustain the profession. https://t.co/pzaR9hlm8k#MortgageBrokers #NARSettlement #RealEstateCommission
— Mortgage Professional America Magazine (@MPAMagazineUS) December 5, 2024
Credit bureaus criticized for pushback on legislation
Fred Kreger, a loan advisor with Global State Mortgage, told MPA the removal of the trigger lead legislation from the latest NDAA had left a “bad feeling,” particularly with credit bureaus and their representative association seen as having exerted pressure on policymakers to scrap the bill.
Nabors said he was disappointed with “anybody that didn’t support the bill,” whether credit bureaus or loan originators that purchase trigger leads, although he noted the breadth of support for the bill as a positive sign for hopes of its revival in 2025.
“We had 43 senators on this. We had 99 congressmen,” he said. “And I think the credit bureaus are going to have to take that into account when they’re putting their plans together [for next year] because this is not just one association that is unhappy. This is the entire mortgage industry,” he said. “That includes banks themselves – they aren’t happy, because they’re being affected too.”
‘The entire industry thinks that practice needs to end’
Top of mind for NAMB in its efforts to push the legislation through next year, according to Nabors, will be reiterating to members of Congress how much the practice harms the consumer.
Credit bureau charges are the only fees originators can collect up front – “and that’s non-refundable if you cancel it,” he said. “So you pay that fee and then you have complete strangers calling you, who you don’t know. They don’t know what your credit looks like and they don’t know what your income or debt ratio is. All they know is that you applied with another company, and they’re going to offer you a deal that they don’t know if they can keep.
“So the consumer then has to pay for two credit bureaus, and they might find out later that the second company isn’t offering as good a deal as the first people did, who had all your information and gave you an interest rate quote based on actual known facts and not just pie-in-the-sky promises. I don’t see how you can be any more anti-consumer than to be able to do that. And NAMB, along with the entire industry, thinks that practice needs to end.”
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