The trigger lead debate has been raging for years; multiple bills to ban or limit the practice have been introduced to Congress, and the largest national trade associations representing originators claim they are dangerous, deceptive, and hated by most consumers. But when asked to prove those claims with empirical evidence, all hands turn up empty.
Trigger leads, which are created and sold by the three national credit bureaus, can lead to an overwhelming amount of calls, emails, and texts to borrowers after they’ve had their credit pulled. There are many anecdotes about borrowers getting besieged by multiple misleading offers, but if anecdotes are given weight, what about the ones from loan originators who say trigger leads have helped them find borrowers better deals?
“I called trigger leads for a long time, and honestly saved customers a lot of money by getting a hold of them and being able to do better than what they had already been offered and agreed to,” said Ali Malcom, sales coach for Mann Mortgage in response to a LinkedIn post.
If both experiences can be true, then which one is the most common experience for consumers? That is where the trouble lies. There is no supporting data that shows more consumers believe trigger leads do more harm than good or visa versa.
Furthermore, there has been no attempt on behalf of the largest trade associations – The National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the Association of Independent Mortgage Experts (AIME) – which represent and lobby for the interests of the originator community, to determine whether most originators believe trigger leads do consumers more harm than good. Both NAMB and the MBA have advocated for legislation that would severely limit the practice, yet admit they did not survey the opinions of their members or know how many of their members rely on trigger leads.
Agencies Drop The Ball
Anyone searching for data on consumers’ experience with trigger leads would likely check with the three national credit reporting agencies or the agencies which oversee them, only to find a whole bunch of nothing.
Asked for information about consumer complaints about trigger leads, the Federal Trade Commission (FTC), Consumer Data Industry Association (CDIA), and the three credit reporting agencies had nothing to show.
“We don’t have data specifically on this topic,” a spokesperson for the FTC said.
There is no publicly available complaint database on the Federal Communications Commission (FCC) website nor is there one on any of the national credit reporting agencies’ websites. The FCC and national credit reporting agencies all declined to provide any information regarding consumer complaints over trigger leads.
Even the legislators who introduced the trigger lead reform bills to Congress – U.S. Rep. Richard Torres (D-NY), U.S. Rep. John Rose (R-TN), and U.S. Sen. Jack Reed (D-R.I.) – have yet to show empirical evidence to support their reasons for legislating away trigger leads and did not respond to NMP’s request for information.
The CFPB complaint database is the only repository where consumers can file complaints, though it's not obvious where they’re filed. There is no specific category showing where consumers can file complaints about trigger leads, so they are scattered among a wide variety of categories and sub-categories. Not even the agency knew how to search its own database for trigger lead complaints. After following the search procedure, the CFPB spokesperson recommended, most of the complaints it brought up did not pertain to the topic of trigger leads.
The spokesperson suggested reading through the narratives to identify which ones pertain to trigger leads, but only half included narratives and at least half of those were either duplicates or irrelevant to trigger leads.
The National Association of Mortgage Brokers (NAMB), the Mortgage Bankers Association (MBA), the Association of Independent Mortgage Experts (AIME) and the Independent Community Bankers of America (ICBA) have all announced their support for trigger lead reform that would severely limit the practice, without attempting to gather the opinions of their borrowers, their own members, or any industry professionals.
NAMB, which supports the Trigger Leads Abatement Act of 2023, claims that trigger leads is a “dangerous practice” that “hurts consumers and damages the overall mortgage marketplace.” But the association could not substantiate those claims with any empirical evidence.
“You have an overwhelming number of consumers complaining,” said Valerie Saunders, who was president of NAMB when the association announced their support for the bill.
But when asked to relay what that “overwhelming number” might be, Saunders said, “I do not have an empirical number…nor do I believe that any other trade association or government agency has an empirical number.”
Leaders of AIME, including former CEO and Chairwoman Katie Sweeney, told NMP, “Trigger Lead reform is currently #1 on our legislative agenda,” after announcing her resignation from the association to lead the Broker Action Coalition (BAC).
The incoming CEO & Chairman of AIME, Jonathan Haddad, is currently under heat from members of the organization for using trigger leads to help his own business, Next Door Lending. He then posted a video to the Brokers Are Better Facebook page, saying he is against trigger leads and in support of legislative reform, even though he said his company does use them and will continue to use them. But he said he would make an exception not to take clients away from AIME members.
The MBA also does not have any data on the subject, yet still put out a call to action to support the House and Senate versions of the Homebuyers Privacy Protection Act.
“We don’t have quantitative data on trigger leads, but ask any lender or consumer, and you’ll hear plenty of stories of complaints and consumers being inundated with calls,” an MBA spokesperson said.
Just today the MBA issued a statement about the legislation saying, “MBA continues to be a fierce proponent for legislative reforms that stop the abusive use of mortgage trigger leads while preserving their value in appropriately limited circumstances during a real estate transaction.”
Anecdotal evidence is not invalid, it is merely unreliable.
For trigger leads, it doesn’t take much stretch of the imagination to think some borrowers feel harassed when they’re inundated with calls from multiple lenders after having their credit pulled. For example, Samuel Royer, broker owner of Salute Home Loans, sent screenshots from his borrower’s phone that show they received over 50 phone calls within a few hours, then a text message to Royer saying how “insane” that is.
Though that may be a valid experience, meaning true, who is to say that is representative of all consumer experiences? After all, there is also anecdotal evidence suggesting that consumers are benefitting from these calls, despite how annoying they may be.
“These clients are thankful and happy to work with the new company that successfully saved them thousands of dollars and provided a better experience,” said Yousef Malallah, director of mortgage banking for Liberty 1 Mortgage. “Credit triggers allow a healthy competition in the mortgage marketplace and prevent clients from being price gouged by lenders.”