The industry hopes to see trigger leads banned this year – but they may not be going away anytime soon
The future of legislation to ban trigger leads is up in the air, with passage in the Senate at the end of last year meaning advocates’ attention now turns to the House of Representatives to push through measures outlawing the practice.
Until that happens, brokers and loan originators will continue to grapple with the question of how to mitigate the impact to their business of those leads, which involve the sale of consumer information by credit bureaus to third-party lenders when a credit inquiry is made.
Lamont Harris (pictured top), of Harris Capital Mortgage Group, told Mortgage Professional America educating clients about trigger leads and what they are – and importantly, who actually sells them – should be top priorities for brokers.
He said confusion and anger on the consumer’s part about an influx of calls after making a credit inquiry can sometimes be misdirected at brokers in the assumption that they’re responsible.
“The first thing that we could do is educate clients early: be up front about the possibility of trigger leads, explain what they are, why they happen, and how clients can protect themselves,” Harris said.
“By doing that, we’ll offer some clear guidance. It’ll reassure the client but, more importantly, it’ll share with the client that I have good intentions and their best interests at heart.”
Despite a recent setback, the Senate has passed the Home Buyers Privacy Protection Act, a bipartisan bill aimed at eliminating the misuse of "trigger leads" in mortgage transactions.https://t.co/79qVilvOtD
— Mortgage Professional America Magazine (@MPAMagazineUS) December 19, 2024
How consumers can opt out of trigger leads
Encouraging opt-outs before running a credit inquiry should be another key consideration, according to Harris. That means advising clients to use resources such as the National Do Not Call Registry and OptOutPreScreen.com, reducing the likelihood of the information being shared with other lenders.
By strengthening current relationships with clients, brokers can also build trust and value throughout the life of the mortgage process, he added. “Clients who feel informed, supported and confident in their broker are less likely to be swayed away with those external offers that might be out there,” he said.
Taking those steps is doubly important because it remains unclear when the Homebuyers Privacy Protection Act, the relevant legislation proposing to ban the practice, will actually come before the House. “I think those are things that we have to do because we’re fighting,” Harris said, “but it just doesn’t seem like trigger leads are going anywhere anytime soon.”
Banning trigger leads an important step for broker prospects
The practice has long drawn the ire of the US mortgage broker community, with leading industry associations including the National Association of Mortgage Brokers (NAMB) and Association of Independent Mortgage Experts (AIME), as well as the Mortgage Bankers Association (MBA), having long led the charge to curb the prominence of trigger leads.
That would mark a significant step for brokers, allowing them to spend time on building long-term relationships with clients rather than defending them or themselves from unsolicited competition, according to Harris.
“I think protecting consumer privacy and fostering trust is a win for everybody in the mortgage industry and not just for mortgage brokers,” he said. “It’ll help brokers build on successful relationships and reputation, which are two things that are really near and dear to brokers.
“After 2008, a lot of that trust was lost because everything was pushed where brokers were to blame. I think this is a huge opportunity for us to regain a lot of that trust that was lost.”
The possibility of a customer receiving a flood of calls from competing lenders after they make an inquiry, he said, dilutes the professionalism of the mortgage industry and prioritizes “excessive, aggressive” marketing tactics over providing a good service.
Brokers who don’t have early conversations with their clients about trigger leads and what they are could also face some angry calls, he suggested.
“In the past, when I wasn’t as well-versed on what trigger leads were and how they could affect my client, I would get out-of-the-blue phone calls from clients thinking that I’d actually given out their information,” he said, “and the client would start that conversation. The initial question would be, ‘Hey, why’d you give out my info?’
“And then once we had a conversation and they were a bit calmer, then I’d be able to talk them down a bit, to educate them on what may have happened. But that right there is something that we’ve got to really get under control.”
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