Congress Halts Trigger Leads, a Nuisance Marketing Technique That Plagues Mortgage Applicants

Both houses of Congress have passed the Homebuyers Privacy Protection Act, a law banning "trigger leads," an insidious marketing practice that can make mortgage applicants' lives miserable. The new law can now move to the president's desk for signature.

The legislation will ban trigger leads, which see many home buyers or refinancers bombarded with nuisance marketing messages from many mortgage lenders if they request a quote from even one.

“It is not unusual for bank customers to receive 100+ misleading texts, phone calls, and emails within the first 24 hours of applying for a
mortgage, and the passage of this bill will go a long way in relieving this burden to homebuyers,” says Jim Nabors, National Association of Mortgage Brokers (NAMB) president, quoted by Senator Jack Reed (D-RI), who co-authored the bipartisan bill.

These marketing campaigns aren't a coincidence. They're a result of a heavily monetized scheme run by organizations that should know better.

Who's Behind Trigger Leads?

You'll have heard endless stories from people who assume their smart devices (Alexa!, Hey Siri!, Hey Meta! ... ) are spying on them. You know what they say, "I was talking at home about buying x this morning, and an hour later I got a text offering me that very thing."

Device manufacturers claim their products never listen in unless you ask a question. And we're inclined to believe them just because of the existential reputational damage and legal exposure if someone could prove they really were spying 24/7.

So, it's someone else who's spying on you when you're the victim of one of these nuisance marketing campaigns. And it's not the obvious suspect. No mortgage lender wants its competitors to know you're a hot lead because it fears they'll swoop in and try to lure you away.

No, the culprits are the credit bureaus. Mortgage lenders have to run credit checks when providing a quote. And that means at least one bureau knows all about you, your contact information, and your active interest in a new mortgage.

Knowing the value of that information, the bureaus run a subscription service. Mortgage lenders can pay money to the bureau to get an alert whenever another mortgage lender makes a credit check on an applicant.

You might think this should have been illegal a long time ago. Well, it looks as if it soon will be, although the law is not due to be implemented for six months.

Support From the Mortgage Industry

Trigger leads seem to be almost as widely hated within the mortgage industry as by their victims, judging by the reaction of the Mortgage Bankers Association (MBA):

"MBA celebrates the final passage of this important bill — a long-overdue measure that will finally put an end to the abusive use of mortgage credit trigger leads," wrote MBA's President and CEO Bob Broeksmit in a statement. "It marks a major victory for borrowers and will create a more efficient, responsible, and respectful home buying process."