Mortgage Trigger Leads Bill Passes Congress

(From InfoSight360) – On August 2, the Senate passed H.R. 2808, the Homebuyers Privacy Protection Act. The Act, which will take effect 180 days after President Trump signs the bill into law, will significantly curtail the consumer offensive practice of mortgage trigger leads.

When a consumer applies for a mortgage loan, consumer reporting agencies often sell this information to other creditors. These creditors may then inundate the consumer with solicitations via calls, text messages, and e-mails. As a result, many consumers mistakenly believe their original creditor disclosed their application details, leading to frustration and dissatisfaction.

Under the Act, a creditor will only be able to obtain a mortgage trigger lead from a consumer reporting agency if:

• The creditor will be making a firm offer of credit to the consumer, and
• The creditor submits documentation to the consumer reporting agency that it –
  • Has authorization from the consumer to obtain his/her consumer report;
  • Originated the consumer’s residential mortgage loan;
  • Services the consumer’s current residential mortgage loan; or
  • Is an insured depository institution that holds a current account for the consumer.

Legislation regulating mortgage trigger leads at the federal level promises to offer much more consistent consumer protection than the present state-by-state patchwork. Currently, eleven states—including Maine—restrict the use of mortgage trigger leads in some fashion. Other states include Arkansas, Connecticut, Idaho, Iowa, Kansas, Kentucky, Rhode Island, Texas, Utah, and Wisconsin.