Buying a home is an exciting time. But excitement can quickly turn into a headache if you’re not careful.
When you apply for a home mortgage or even preapproval, you leave yourself vulnerable to so-called “trigger leads” and identity theft down the road. The Chicago Tribune’s Kenneth Harney explains what they are:
When you apply for a home mortgage or a preapproval, the loan officer pulls your credit from the national credit bureaus. One or more of the bureaus then convert the fact that you are shopping for a mortgage into a commercial product—a trigger lead—for immediate sale to competing lenders. This allows those competitors to contact you and solicit your business before you get locked in with the lender to whom you’ve applied.
Trigger leads are created and sold superfast—often within 24 hours of your loan application. Out of the blue, your phone might ring and suddenly you’re the target of a new pitch from a competitor offering a deal that may be real, deceptive or no better than the one you’ve already been quoted.
Enough of these lead-driven offers are deceptive that an industry group, the National Association of Mortgage Brokers, last week began pushing a campaign on Capitol Hill for an outright ban. John G. Stevens, president of the association, which represents midsize and small mortgage companies, told me that trigger leads sold by the national credit bureaus inevitably “expose borrowers to identity theft,” disrupt ongoing mortgage transactions and open the door to a wide range of “unscrupulous” come-ons.
If you’re buying a home, know the risks—and don’t answer suspicious phone calls.