A trigger lead is a marketing product created by national credit bureaus. When a homeowner applies for a new mortgage loan, Experian, TransUnion, and Equifax sell information about the loan application to participating lenders interested in consumers actively seeking new mortgage loans. These lenders then use this information to start a marketing process to compete for the borrower’s business.
Trigger leads are legal and can theoretically benefit consumers by allowing them to receive the best possible price on services when multiple providers compete for their business. However, trigger leads are often used by companies that may misrepresent themselves, potentially tricking borrowers.
How Do Trigger Leads Work?
Responsible consumers know that carefully researching lenders and offers is key to finding the best mortgage or auto loan. However, once you apply, you might start getting calls from lenders you’ve never heard of with offers that seem too good to be true. When you fill out a loan application and give a lender permission to pull your credit report, the national credit bureaus note that you are shopping for credit. The credit bureaus then turn this information into a trigger lead and sell it to competing lenders, often within 24 hours of your application.
The Federal Trade Commission (FTC) has stated that trigger leads can help consumers discover other loans and compare costs and terms more easily.
Risks to Divorcing Homeowners
While trigger leads are legal, a mortgage lender purchasing trigger leads cannot know the underlying reason the homeowner is searching for a new mortgage loan. For instance, a divorcing homeowner may be exploring options to refinance the existing mortgage loan on the marital home. If the divorce petition has not been filed, and the current mortgage lender of the marital home purchases the trigger lead, they may reach out directly to the other spouse to inquire about the refinance. This can result in the other spouse discovering the divorce plans unexpectedly.
How to Prevent Trigger Leads
Whether a consumer is trying to protect their personal information or streamline the borrowing process, there are ways to block trigger leads:
- Sign up for the National Do Not Call Registry: Lenders buying lists of trigger leads are required to scrub their list against the no-call registry.
- Register at OptOutPrescreen.com: This official site allows people to prohibit their name from being added to lists from major credit reporting agencies that companies use to provide firm offers of credit or insurance.
The Reality of Trigger Leads
In theory, trigger leads may help consumers obtain better mortgage or auto loan offers. However, in practice, these sales tools expose consumers to solicitors who may employ deceptive practices and lack the knowledge to help divorcing homeowners make informed decisions about their home equity solutions.
The Importance of Working with a Certified Divorce Lending Professional (CDLP®)
It is crucial to work with an experienced mortgage professional who specializes in working with divorcing clients. A Certified Divorce Lending Professional (CDLP®) can provide invaluable advice and answer questions specific to your situation. For more information and personalized advice, please don't hesitate to reach out to me directly.
This is for informational purposes only and not for the purpose of providing legal or tax advice. You should contact an attorney or tax professional to obtain legal and tax advice. Interest rates and fees are estimates provided for informational purposes only, and are subject to market changes. This is not a commitment to lend. Rates change daily - call for current quotations. The information contained in this newsletter has been prepared by, or purchased from, an independent third party and is distributed for consumer education purposes.
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