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| WASHINGTON, D.C. — Mortgage brokers spoke out against the use of trigger lists. Meeting in the nation’s capital for a legislative conference, panelists discussed how the controversial lead generation method creates more problems than business.Brokers don’t like having their deals blown by telemarketer calls promising “pie-in-the-sky” interest rates and loan terms. And consumers, irate at receiving phone calls within hours of making a loan application, blame their loan officers for releasing private credit information.
Trigger lists are based on consumer information sold by the credit bureaus after the credit repositories receive an inquiry by a mortgage broker or loan officer. Loan officers grouse that the lists make them the free marketing arm for their competitors. Lead generator companies sell the lists to lenders for thousands of dollars a month. Some of the trigger lists are telephonic, some use direct mail. And more and more lenders are buying the leads. A panel at the National Association of Mortgage Brokers’ 2007 Legislative & Regulatory Conference in Washington, D.C., this week offered brokers advice for fighting the controversial practice. Panel members noted that a federal prohibition on trigger lists is not soon likely. Indeed the Federal Trade Commission recently indicated that it lacks the authority to regulate trigger list telemarketer pitches to consumers who have applied for mortgage loans within the last 12 to 24 hours as long as they contain firm offers of credit. But mortgage brokers say the hucksters lack crucial information, such as a property appraisal, necessary to offer a feasible deal to borrowers. Michael Calhoun, the president of the Center for Responsible Lending, suggested that loan officers educate borrowers on the ways that trigger list-happy telemarketers offer deals that are too good to be true. Such offers, especially in the subprime market, often don’t include items held in escrow. They don’t include payments for taxes and insurance, Calhoun said. The offers also don’t include any warnings about loan products with built-in payment shock when teaser rates expire. “It’s not an apples to apples comparison,” he said. Ginny Ferguson, co-owner of Heritage Valley Mortgage, Inc. and Chair of NAMB’s Communications Committee, denounced the offers stemming from trigger lists as fishing expeditions, not firm offers of credit. Under the Fair Credit Reporting Act, a consumer reporting agency may furnish a report concerning any consumer in connection with any credit or insurance transaction not initiated by the consumer only if the consumer authorizes the agency to provide such a report for the transmission of a firm offer of credit or insurance. But what constitutes a firm offer is still open to interpretation. More than 170 lawsuits have reportedly been filed over the question of what constitutes a firm offer of credit. Ferguson said many of the trigger list telemarketers circumvent the federal “Do Not Call” list by claiming to be affiliated with the borrower’s lender. The telemarketer then tells the consumer they understand that the consumer is in the market for a loan and wants to know what terms the consumer has been offered. She said if the consumer provides the requested information, it’s easy for a “bait-and-switch” offer from other lenders as well as for identity theft of the consumer’s private information to occur. Indeed, one Maryland would-be refinancer reported that after he contacted a broker for a refinance, he even received e-mails from companies explaining that they had his loan request and needed more information. A mortgage broker in the audience said he had received 12 calls in the past three weeks from customers angry blaming him for selling their information to others. He said all 12 customers said the telemarketer falsely claimed to be connected to his company. Several of the customers complied with the telemarketer’s requests and volunteered more information before catching on to the deception. The broker said none of them wanted to be solicited. He said he doesn’t give leads to realtors who pass his leads around but complained that he did not have that choice when dealing with the credit bureaus. Brokers can advise consumers to take several steps to stop trigger list offers. Many consumers are already aware of the federal “Do Not Call List.” Brokers can also advise consumers to opt-out of having their names and addresses supplied to others by the national credit repositories. Under the FCRA, a consumer can opt-out for five years or permanently. Consumers can opt-out by going to OptOutPrescreen.com to and notify the national repositories to remove their names. The five-year opt-out option becomes effective five business days after the consumer makes the request. Consumers can also opt-out via a toll free telephone number. If a consumer changes their mind, they can add their name back on the list. Consumers can still receive solicitations by mail. But brokers can let them know that they can opt-out of direct mail inquiries by going to the appropriate Web site to request they be eliminated from receiving such inquiries. One audience member offered his own suggestion for fighting back against trigger lists. Gaining immediate applause, the mortgage broker suggested using market share and market pressure to get the repositories to stop selling the lists. He said NAMB should go to one of the credit repositories and, if it agrees to stop providing trigger lists, then the advocacy organization should endorse that repository and encourage brokers to use it as their sole source for credit information. One panelist approved of the idea because market pressure can “move the needle,” but he noted that Fannie Mae and Freddie Mac would also have to be approached. |
