“Triggers” Are They a Legal Scam?

Just when I thought I'd seen it all, another scam came along to shock me. A few yeas ago I received a call from one of my clients to refinance his home. The day after I pulled his credit report, my client emailed asking if I had someone call him regarding his loan application. I emailed back, informing him no one should have contacted him from my organization. I really didn't think too much about it until this week when another client contacted me about a call he received for re-financing. This client doesn't own a home. I pulled his credit report for a home purchase. This really got my attention. The solicitor has called him no less than 4 times, not counting calls he's received from other brokers trying to vie for his business. My client was pretty upset over the violation of his privacy. Thankfully, I've known this client for many years. I immediately contacted the credit reporting agency I ordered his report through. My customer service rep told me this is a new marketing program that Experian and Equifax put into place to increase their profits. They market overnight mortgage inquiry leads to competing brokers. What's sold to these "competitors" I consider very invasive. The information consists of, but is not limited to:

• Credit Score
• Open Mortgage Balances
• Mortgage Origination Date
• Revolving Debt Balances
• Loan to Value Ratio's
• Bankruptcy Presence
• Monthly Mortgage Payments
• Property Type

Most consumers assume, when they apply for a refinance or purchase that their dealings with the broker would remain confidential. What do you think? Where do you think "the line should be drawn"? I guess it probably depends on whether you believe that your mortgage inquiry should be a private matter and not trigger dissemination of your credit score, debt levels and other sensitive information to people who plan to pester you with calls and junk mail.

While I'm outraged over this privacy violation, I'm just as concerned over the confusion factor this has certainly cause. The un-informed consumer may give out additional private information to unknown individuals thinking it pertains to their current loan in process. This individual may have nothing to do with lending. They could be involved with identity theft which seems to be running rapid these days.

Another issue is "bait and switch". I've had clients call me during the loan process asking me about some ad they read or mailer they received stating very low interest rates and fees. I have my client call the broker and ask for the rate to be locked. It's amazing the excuses my clients receive as to why the rate can not be locked after the request.

Consumers be smart, if you apply for a loan with your broker or lender and you receive a call from some stating they were informed by your lender that you are looking for a loan, think twice. Why would your lender let anybody else know about your application?