Coalition backs bill to protect homebuyers from unwanted solicitations
A diverse coalition of housing and financial services stakeholders is calling on Congress to pass legislation restricting the use of trigger leads in the mortgage industry.
Trigger leads refer to the practice of data brokers purchasing information from credit reporting agencies when a consumer applies for a mortgage. It was suggested that consumers often feel overwhelmed by the influx of calls and offers, often mistaking them for their chosen lender and accusing that institution of selling their data.
The Homebuyers Privacy Protection Act of 2024, a bipartisan effort, aims to protect consumers from unwanted solicitations after applying for a mortgage.
If passed, the proposed legislation “would curb the abusive use of mortgage credit ‘triggers leads’ in all but a limited set of circumstances,” the coalition stated in its letter to the chairs and ranking members of the Senate Banking Committee and House Financial Services Committee.
This would include instances where the third party is the originator of the current mortgage, the loan servicer, or an institution where the consumer holds an account. In all other circumstances, explicit consumer consent would be required.
“Entities that have no relationship with the consumer are buying trigger leads as soon as a customer applies for a mortgage – and then bombarding the applicant with hundreds of confusing calls that seek to lure them away from their chosen lenders,” the letter read. “Naturally, consumers often call to complain to the mortgage lender they have chosen, accusing that company of selling their data.”
Read more: ‘Trigger lead’ -ing your customers away?
This often leads to complaints against the initial lender, even though they have no control over the situation.
The Homebuyers Privacy Protection Act would limit the use of trigger leads to situations where the soliciting lender has an existing relationship with the consumer, such as being the current loan servicer or holding an open account for the individual.
“The Homebuyers Privacy Protection Act would stop the abusive use of trigger leads – while narrowly preserving them for legitimate uses such as existing customer relationships,” the coalition wrote.
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