MortgagesUndressed

Jon Miller both phoned and made a comment on the previous Malcom and the Trigger list article: I asked if he minded if I made it a separate posting on the site - he of course just wanted a link. Jon will be doing our Bellevue Undressed blog, I highly reccomend him. His website is jonmillerteam.com

His comments are important please read this and do what you can for the consumer:

1. Jon Miller Says:
   December 22nd, 2006 at 1:21 pm eThe trigger list is the ��dirty little secret�� of the credit reporting bureaus. As a real estate agent, I started noticing that my clients were barraged with mortgage offers almost as soon as they made a mortgage loan application. This seemed to be way too coincidental. My real estate team started snooping around for information. I found out about the Trigger Report from an officer at a major lending institution.Apparently, as soon as a loan officer pulls a credit report for a mortgage, the lead is published and sold by the credit reporting bureas to multiple lending institutions who begin barraging home buyers with unrealistic rate offers. Once they hook the buyer, they frequently notify the buyer (usually days before closing) that they didn’t qualify for the rate �� even if they supposedly thought they were locked �� and are switched into a higher rate. With a predetermined closing date only days away, the home buyer has no choice but to complete the deal. In fact, after the initial shock of the higher rate, the lender sometimes comes up with a bit of a rate improvement just to appease the borrower. However, the borrower should beware �� this usually means that the lender just put them into a mortgage product with a prepayment penalty. Now, the lender has baited and switched the consumer two separate times into a horrible situation - a high rate and a prepayment penalty.The public should have no mercy on the companies that participate in this activity - lenders or credit reporting companies. This ought to be illegal!!The original loan officer should sue the credit reporting company. After all, the loan officer that originally requested the credit report did not pay a fee for the credit report - only to have his client sold as a lead to multiple other lenders. Shame on the companies that participate in this activity. It may not be illegal, but it is not ethical.

   I beleive there is STRONG potential for a class action lawsuit against the credit bureaus for this kind of activity. Borrowers should sue for the drop in their FICO scores, lenders should sue for their lost commissions, and Realtors should sue for lost commissions. This is a smoking gun that will have the same effect on the credit bureaus as silicon breast implants had in bankrupting their manufacturers.

   I do not know if it is possible, but loan officers should insist in their contracts with credit reporting companies that their clients will not be sold as a lead to third parties. Furthermore, lenders need to communicate these activities to their clients and ask them to opt out of unsolicited credit offers by calling 1-888-5OPTOUT (1-888-567-8688).