Legislation to prohibit so-called “trigger leads” in the homebuying process once again has been reintroduced in the House and Senate.
“Trigger leads” are controversial for both consumers and mortgage industry participants. When a mortgage lender orders a credit report on a consumer, the credit bureau providing the report may then alert various other mortgage lenders who have subscribed to a service of that fact, which is a good indication that the consumer is seeking a mortgage loan.
The consumer then will receive unsolicited offers from other mortgage lenders, often prompting the consumer to complain to the mortgage lender they are working with. Of course, that mortgage lender typically advises the consumer that the last thing they would do is let their competitors know that the consumer was seeking a mortgage loan.
The House and Senate legislation would amend the Fair Credit Reporting Act to prohibit consumer reporting agencies from furnishing a trigger lead except in limited circumstances. It passed the Senate during the last Congress but was not passed by the House.
Lead cosponsors of the House bill, H.R 2808, in this Congress are Reps. John Rose, R-Tenn. and Ritchie Torres, D-N.Y. Lead cosponsors of the Senate bill, S. 1467, are Sens. Bill Hagerty, R-Tenn., and Jack Reed, D- R.I.
“The legislation would protect potential homebuyers from unsolicited, predatory, sales tactics while preserving fair competition,” Rose said, as he introduced the bill.
“Too often, homebuyers find themselves bombarded with unsolicited offers beginning the moment they apply for a mortgage that persist indefinitely,” Torres said.
“Unsolicited phone calls caused by trigger leads have become an intolerable nuisance to many Tennesseans,” said Hagerty.
And Reed said, “Consumers should not get needlessly ‘spammed’ with unsolicited, predatory offers just because they take a necessary step in the homebuying process.”
The legislation is supported by a broad group of financial trade and consumer advocacy groups, including the Mortgage Bankers Association, the Independent of Community Bankers of America, the American Bankers Association, the National Consumer Law Center, the Consumer Federation of America and Americans for Financial Reform.
MBA’s President/CEO Bob Broeksmit, CMB, said that the MBA has worked closely with industry stakeholders and a large bipartisan group of lawmakers to push for action that would end the practice of mortgage credit leads.
“Consumers remain vulnerable to trigger leads abuses, and we believe strongly that this common-sense legislation will curb the practice while preserving its value in appropriately limited circumstances,” he said.
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