You hear a radio or TV commercial for residential mortgage loans and decide it sounds great. You call or log in to a website and apply. All of a sudden, you are barraged with irritating and non-stop phone calls from a gazillion competing lenders, ultimately annoying you, if not confusing you. What the heck is going on here? All you wanted was the best rate and service, not the worst headache. Answer: You just became a “mortgage lead,” otherwise known as “the hunted.”
The Federal Trade Commission, the agency that has regulatory oversight powers over consumer credit, lacks the legal authority to enforce a stoppage on unwanted “trigger list” phone solicitations to consumers who have applied for mortgages within the preceding 12 to 24 hours.
Many lenders invest heavily in leads and can customize their orders to provide targeted FICO scores, loan balances, credit card debts, estimated home values, etc. Basically, they know a lot about you financially way before the rate pitch is thrown.
“Lead generation” companies sell your name to multiple lenders at a pretty penny for the opportunity to get your mortgage application. The lists are composed of consumer information and provided and sold by the big three credit bureaus—Equifax, Experian and TransUnion. As soon as your credit is pulled by the lender, an “inquiry” has been made and the lead, being you, is triggered.
Some critics say that trigger lists potentially open the door to bait-and-switch schemes where, weeks later, the low-ball rate is non-deliverable. In addition, the mass distribution of mortgage loan applicants’ financial information can open the door to identity theft, with their private financial data floating around the Internet.
Some are of the opinion that offers by telemarketer loan officers may not meet the Fair Credit Reporting Act’s criteria for “pre-screened” firm offers because of the lack of crucial information necessary to extend a mortgage (such as appraisal, income and assets). Others say that the fair credit act allows “firm” offers of credit using pre-screened lists, and doesn’t require lenders to know everything about the consumer’s credit situation to make a firm offer, but just may require a post-review of income and assets.
There are legitimate companies out there that actually can deliver their offer, if you fit their guidelines, so practically speaking, if you are a bottom-line person, do you really care about all this federal mumbo jumbo, if the offer is real and deliverable? Ask yourself the following: Am I really busy? Do I want to field a gazillion phone calls? Do I know anyone in the business that I trust (if you don’t, I’m happy to introduce myself, unless you know me already)? Do I know enough to know if the offer and terms are real—or not? Do I want to deal with someone I don’t know? Do I really win when banks compete (over the phone)? If you answer these questions and have come to the conclusion that you do not want to deal with the “in the middle of dinner” phone calls, small talk, newbie telemarketers practicing their pitch on you, SEE BELOW.
Consumers can opt out of pre-approved/pre-screened offers by visiting www.optoutprescreen.com or by calling 1-888-5-OPTOUT. You can also prevent telemarketing solicitation by also registering with the “do not call” list which can be accessed at www.donotcall.gov or at (888)382-1222.
Carl Guzman, NMLS# 65291, CPA, is the founder and president of Greenback Capital Mortgage Corp., a Zillow 5-star lender http://www.zillow.com/profile/Greenback-Capital/Reviews/?my=y. He is a residential and reverse mortgage financing expert and a deal maker with over 26 years industry experience. Carl and his team will help you get the best mortgage financing for your situation, and his advice will save you thousands! www.greenbackcapital.com [email protected]
By Carl Guzman
