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By Valerie S. Johnson
There’s a new game in town. You apply for a mortgage. Suddenly, other potential lenders call and tell you they can give you a better deal. How did they even know you were in the market for a home loan?
Here’s how it happened: when you applied for a mortgage, your lender or broker pulled your credit report. This tripped a trigger lead – the credit bureaus identified you as a serious buyer. The credit bureaus – Experian, Equifax, and TransUnion – sell lists of trigger leads to other potential lenders and brokers. Those lenders specify the type of borrowers they want to court, for example those with good credit or individuals with subprime credit.
The business of selling trigger leads has been around for only about eighteen months, but it has already become controversial. From the borrower’s point of view, it may be an invasion of privacy. On the other hand, it may introduce a healthy dose of competition for loan products. While currently legal, some states are taking steps to limit or prohibit this practice.
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There’s a new game in town. You apply for a mortgage. Suddenly, other potential lenders call and tell you they can give you a better deal. How did they even know you were in the market for a home loan?
Here’s how it happened: when you applied for a mortgage, your lender or broker pulled your credit report. This tripped a trigger lead – the credit bureaus identified you as a serious buyer. The credit bureaus – Experian, Equifax, and TransUnion – sell lists of trigger leads to other potential lenders and brokers. Those lenders specify the type of borrowers they want to court, for example those with good credit or individuals with subprime credit.
The business of selling trigger leads has been around for only about eighteen months, but it has already become controversial. From the borrower’s point of view, it may be an invasion of privacy. On the other hand, it may introduce a healthy dose of competition for loan products. While currently legal, some states are taking steps to limit or prohibit this practice.
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