Telephone Mortgage Offers May Violate Law

Picture this: You apply for a Florida home loan from a local company on a Monday afternoon. By Tuesday morning, you’re suddenly getting unsolicited phone pitches from out-of-state lenders who seem to know a lot about your personal finances, including:

• Your credit score
• Your credit card balances and other revolving credit accounts
• The approximate market value of your home and how much you owe on it
• Your home address and (obviously) your phone number

Thousands of Florida home loan applicants around the country are receiving uninvited pitches like these, sometimes less than a day after getting their mortgage quote. Now a major industry group, syndicated columnist Kenneth Harney reports, is planning a campaign to put a damper on the practice.

“There are very serious privacy, identity-theft and bait-and-switch issues involved here,” said Roy DeLoach, Executive V.P. of the National Association of Mortgage Brokers (NAMB).

Locally, the practice Florida mortgage brokers target is known in the industry as trigger-list marketing — a warp-speed version of the prescreened credit card offers you routinely get in your mailbox.

It works like this: When Florida mortgage lenders check your credit to give you a rate quote, one or more of the national credit bureaus take that inquiry and essentially turn it into a marketing product. The credit bureaus defend their right to sell applicants’ personal info., arguing that it is simply a zippier form of marketing prescreened lists for credit offers — something they’ve been doing for years.

Tim Summers, a V.P. at Experian, one of the three dominant national credit bureaus, said in an e-mail that his company’s “Prospect Triggers” program “provides consumers with choice and potentially significant cost savings by delivering relevant information at the decision-making point instead of weeks after a mortgage lending choice has been made.”

Summers said the program meets all requirements of federal credit and privacy statutes, but the National Association of Mortgage Brokers doesn’t agree. When bureaus sell overnight trigger lists to so-called third-party lead generators, the brokers argue, they fail to comply with a key provision of the Fair Credit Reporting Act.

Anyone receiving consumers’ personal information must be in a position to make a “firm offer of credit” or must receive permission from the consumer for credit data, they say. Third-party lead generators get no permission and are in no position to make an offer, firm or otherwise.

The brokers also contend that even lenders who obtain trigger lists may not be in a position to make the firm offers that the law requires.

An offer for a Florida mortgage is vastly different from a firm offer for, say, a credit card. The mortgage process is more complex and mortgage rates are more difficult to quote on the basis of a credit score alone.

To make a firm quote, DeLoach says, “you need to know a consumer’s income, you need to have work with an appraiser” — in other words, you need to know a lot more than the telephone marketers have in hand.

Are the rate quotes for real? Or will they morph into costly home loan scams weeks or months later?

You really can’t know. But what you can do is remove yourself from all potential trigger-list come-ons by opting out. Much like the federal Do Not Call program, you can opt out by going to optoutprescreen.com or by calling 888-567-8688.