National Association of Mortgage Brokers (NAMB), an association that represents the best interests of mortgage brokers and small to mid-size mortgage lenders in local communities. NAMB champions the broker-borrower relationship in the legislation introduced by Congressman Lacy Clay, Chairman of the Committee on Financial Services, designed to ban trigger leads. The Trigger Leads Abatement Act (H.R. 5720 – The Trigger Leads Abatement Act) will protect consumers from having their data sold to companies who have no relationship or transactional connection to the consumer.
Mortgage trigger leads are a multi-million-dollar business in the home lending world. Trigger leads are sold by national credit bureaus to mortgage lenders based on online data that indicates a consumer is “shopping” for home financing. These consumers are unaware that once they enter their data in an online inquiry, their data, which has significant personal information, is then sold by the credit bureaus from $5 to $150 and above to home financing companies who are looking for “hot leads”.
“The credit bureaus compile trigger lists daily and sell them to numerous buyers across the US, including to so-called ‘lead generators’ who then resell the list to even more companies,” said Rocke Andrews, president of NAMB.
In an effort to protect the mortgage broker industry, NAMB is on Capitol Hill advocating that the much needed consumer protection of data be exempt of impacting the ability of the mortgage broker who originated the relationship to maintain an ongoing relationship with the borrower, as well as the company who holds the servicing rights.
“The mortgage broker has no control when a lender sells off their borrowers’ loan to another lender or servicer,” says Andrews. “Our members are individual or small businesses who rely on the long-term relationship with their borrower. Therefore, this act should protect the small businesses or independent across the country when it comes to this act and allow them to maintain that relationship beyond the transaction.”
At the upcoming NAMB FOCUS Conference, NAMB will be discussing the topic with its members. Additionally, NAMB is calling members and mortgage brokers and small business loan originators to join the lobbying efforts through NAMB’s legislative action center.
Additionally, the sale of trigger leads can impose danger to consumers in terms of potential risk of identity theft or activities that are deemed “unscrupulous”.
“We have NAMB members who have reported an uptick in bad actors using trigger leads against the elderly when refinancing their present mortgage,” said Andrews. “Congressman Clays’ bill will go a long way to stop this type of elderly abuse.”
“Unfortunately, there are people who use all kinds of unethical tactics to target borrowers who have initiated the process of obtaining a mortgage,” said Andrews. “This activity should be classified as an unfair and deceptive trade practice and banned, with the only exception being those that have an ownership interest in the current mortgage for portfolio retention purposes. The only way to protect the consumer is to close this loophole immediately, and we thank Congressman Lacy Clay for seeing the harm to consumers brought on by “trigger leads”.”