MortgagesUndressed

Our new contributor to RealEstateUndressed.com, Jon Miller is up in arms about the trigger list. He is all over the reasons it is a bad policy. But Jon not only gripes, he writes and takes action. He wrote an important letter to our state NAR about the trigger list.

I post now the response he received to his letter.

_____

From: Bob Mitchell [mailto:Bob.Mitchell@warealtor.org]
Sent: Monday, January 08, 2007 11:06 AM
To: Jon Miller
Cc: Bryan Wahl
Subject: RE: Issue for Govenment Affairs

Thank you Jon for your thoughtful letter outlining this alarming practice.
I’m going to contact the Assistant Director for Consumer Services at the
Washington Department of Financial Services about this issue. After I have
this visit I will contact you by e-mail or phone to discuss next steps.
Thank you for bringing this matter to our attention.

Now what action can you take? Read the letter Jon wrote. Let’s do more than hope laws are passed to stop this act of greed started by Experien and gleefully copied by the others. Larry Cragun.

Yes you can opt out but note it takes 30 days to be implemented. As the FTC has not yet issued a fine to trigger list opt out violators, the opt out provision is being ignored by most sales marketing mortgage pseudo loan solicitors loan officers.

The FTC does not consider this a problem and won’t without detailed specific complaints by harmed consumers. (Now isn’t that suspicious?)

You should opt out for multiple reasons click here, but if approached, take the agressive stance against the soliciter. Tell them why you are asking for compete information on them: take all of their personal and business data - all of it.

Go to the FTC website and file a complaint.

If you are a consumer advocate and want to work on something with meaning and value, get involved.States can make this illegal. According to Bonnie Erickson of Real Estate Snippets.com only one state has outlawed trigger lists. That probably leaves yours needing you.

You can also phone 1-888-5-OPT-OUT�� that’s 1-888-567-8688 to opt out. Remember this is only a partial solution. Very partial to the credit bureaus. Larry Cragun

Read this book. Read this series of trigger list articles. Larry Cragun

I am goint to pick up the pace against trigger lists. In going through orientation with our attorneys and credit providers I find the harm is greater than suspected and the government is looking the other way.

Ignoring this problem is so blantant I wonder if the credit bureaus are buying off the bureacrats.

Simply put - when you apply for a mortgage the bureaus now sell you as a hot lead. You trigger an assault on all that is important to your identity security.

Perhaps it is just beause it isn’t press yet, the Federal Government is looking the other way. They are doing nothing because they say they have no volume of compaints yet.

There are laws violated when people want to opt out, similar to the do not call list, but no bureau has been fined yet.

If you were in search of a mortgage lead, what better source than a notification Joel Blow has just applied for a loan.

Today, a case of stolen identity off the Trigger List. Anyone can buy the names off these lists. One of our mortgage reporting agencies had a client called by someone who was sold to the trigger list. The voice on the phone said do you not know you have a delinquency on your credit report? I will fix it but I must have your social security number.

You got it; identity theft.

The entire industry is in a high security mode. Not Experian, Trans Union, Equifax, and Innovis.

There is no security for the consumer in this sale of your name.

You may think it is nice to get offers of better rates, but you are in danger of being ripped off.

Larry Cragun

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).

This is a recent true story, with names and other facts changed to keep Malcoms wife from killing him.

Malcom and family worked their agent real hard. They had to find the perfect home. It took weeks. But hey, a new listing came on the market and the agent rushed them out to see it. This was it! They knew it when they walked through the door. A full price offer was quickly tendered and was accepted. This family was on cloud 9 as families are in big days like this.

But the dream was dashed and they cannot buy for now, this home will be a gonner. A couple of weeks before they found this home, good old Malcom decided to shop for rates. He had been approved by the real estate agents experienced lender; using credit report, automated underwriting, pay stubs, bank statements - the works.

But Malcom started getting phone calls and letters from lenders. They seemed to come out of the woods. At first Malcom asked the loan officer if he could quote a lower rate, and got a “lets see what rates are when you find a house answer - this is what rates are at today.” Malcom wanted lower. So Malcom turned open the floodgates. Every lender that contacted him got a chance. This was great, look at those quotes he thought. But Malcom let so many of these lenders do a quote it ruined his credit score. Without telling anyone, even Mamma he did all of this.

It came time for approval and all went well. That is all was well until the underwriter had to allow the creation of the loan documents. She ordered a new credit report. Oh what she found. What is that saying? “How low can you go?” Malcoms score was real low. Too low. He didn’t qualify.

These lenders, how did they know Malcom was in the market? The answer, “The Trigger List.” All three major credit bureaus knew Malcom was purchasing. From them Malcom was sold as a hot lead to their most anxious to sell you a loan customers.

The loan officers that work for these guys have no reason to build a long term relationship with you. Heck the loan officers are either in training, or not skilled enough to build the kind of reputation it takes to survive the lending game. So they quoted Malcom rates they couldn’t deliver.

Everyone was pretty shattered.

Not to worry Malcom said, I have another lender that promised me a great deal. WIthout anyone, even Mamma knowing, Malcom had another lender to the drawing the documents level. I should say, the lender had Malcom on the Hook, Line, and Sinker. This lender had even sent another appraiser out to the new home. So hopes were still alive.

For one day.

This lender had quoted Malcom a no fee 30 year fixed for 5 1/2% interest. As things got to the end the rate was 8%. What happened to the 5 1/2%? Oh, I couldn’t get that loan past underwriting, you don’t qualify for that rate.

Malcom had figured out, too late, that he had been mislead on the 1% deal, but went back for that. He didn’t qualify for that either.

What was it? Stuipidity? Yes. Greed? Yes. The Trigger List? Yes.

Malcom has no home and two appraisals to pay for.

Pretty Sad. Sorry to report it. Work with a lender that works with your agent. They have too much to lose by messing you up. Don’t deal with phone lenders, they have nothing to gain by being credible, ethical, and honorable. They know you not, know not your agent, and will be gone onto something else next week.

I wonder what it is like in the Malcom apartment today. I am thinking of a lesson learned: If momma ain’t happy, no one is happy.”

Clicke Here for Advertisment of the trigger lists
LarrY Cragun

Pardon me for labeling our story with your name John, it has no special meaning other than your comments caused me to be accountable for the claim I made to lock. I do appreciate your taking me on, really.

The Unethical and Immoral factor in this title is probably going to result in some major law suits against the credit bureaus by lenders. I hear it may even become a class action law suit situation.

Unethical and Immoral is by my definition, you draw your own conclusions.

What I am writing of is this: It has come to my attention that once a lender pulls a credit report for a borrower the credit bureaus are selling this situation as a hot lead to numerous of their preferred mortgage bank customers.

So lets apply it to John. John is purchasing a home. We have to close December 22nd. The seller has a new home in process, that seller needs the funds to close. All parties have planned this closing meticulously; friends to help move, the only U haul in town is reserved, utilities are notified, and the drill goes on and on.

John has been blitzed with offers from banks that have bought this lead. He has no idea of the quality or integrity of the lenders. He does know they are offering great rates. I mean great rates. Well now what? Our journey has not led John to a better rate. What does he do? Find out tomorrow. Larry Cragun

I do believe it is unethical and immoral for a credit bureau to sell the fact my client has a transaction in process to my competitors. I paid for the report. Unethical for sure. I see a law suit coming. Not from me.