RISMEDIA, Feb. 7, 2008-(MCT)-There is a bee buzzing in the bonnet of many mortgage brokers right now. And some consumers who have encountered the marketing tactic at issue might not be too pleased, either.
It’s called “trigger lead” buying, according to local mortgage brokers. The practice involves mortgage companies purchasing information about potential borrowers from credit bureaus, and using the information to solicit business, local mortgage brokers said.
Evidently, with borrowers in high demand, more mortgage companies are turning to that approach. Some Tucson mortgage brokers said that they are hearing complaints from borrowers who are getting mailings, phone calls and even fliers on their front doors from competing mortgage companies after they have their credit reports pulled.
“That’s just kind of creepy, from my perspective,” said Gary Franks, vice president of sales at Ventana Mortgage Corp. and president of the Southern Arizona Chapter of the Arizona Association of Mortgage Brokers.
“If I’m a consumer and I go to a mortgage company, do I want everybody under the sun knowing it? No.”
Both the Arizona Association of Mortgage Brokers and the National Association of Mortgage Brokers are against the use of trigger leads.
Stan Lund, president of the Arizona Mortgage Brokers Association, said the competing offers from other companies “confuse” borrowers and may provide them misleading information about rates and fees.
“All the sudden, someone tries to steal that loan away,” he said.
But one mortgage company executive said the use of trigger leads can be a benefit to consumers who might not be aware of better deals.
Carmine Russo, president and CEO of Home Loan Executives, said his company uses trigger leads to educate borrowers, along with trying to drum up business.
In the past, some companies gave trigger leads a bad name by using them for predatory lending schemes, he said.
But his company simply distributes fliers directing borrowers to an informational Website on mortgages created by Home Loan Executives, www.savetucson.info.
Other mortgage lenders might oppose Home Loan Executives’ use of trigger leads because buyers could become aware of being overcharged, Russo said.
“We’re not actually out there trying to steal people’s loans,” Russo said. “What we’re doing is trying to protect the public.”
“We’re not actually out there trying to steal people’s loans. What we’re doing is trying to protect the public.”
Copyright © 2008, The Arizona Daily Star, Tucson
Distributed by McClatchy-Tribune Information Services.