Pull the "triggers!" That’s the demand from the National Association of Mortgage Brokers, a 27,000-member trade group that is the largest in the home lending field. The “triggers” it wants to pull have nothing to do with weapons. Instead, the group is targeting a little-known marketing product developed by the three national credit bureaus.

The concept works like this: When you inquire about or apply for a home mortgage, the loan officer typically does a quick check on your credit -- tapping into the online files of Equifax, Experian and TransUnion, the three national credit bureaus.

What the loan officer usually doesn’t know, however, is that the credit inquiry -- along with the applicant’s key financial data -- is immediately passed on to competing lenders around the country who’ll pay the credit bureaus for fresh “leads” about who’s interested in getting a new mortgage.

The leads, known in the industry as “trigger lists,” are in competing lenders’ hands within 12 to 24 hours of your inquiry or application. Lenders can then phone you and offer mortgage quotes that sound better than the one you just got locally, but that may turn into bait-and-switch deals weeks later.

Trigger leads contain not only applicants’ names, addresses and contact information, but a lot of their most private, personal financial information, such as:

• Your outstanding balances and limits on credit cards and other revolving accounts.

• The size of your current home mortgage, the amount of second mortgages or credit lines, and the estimated value of your house.

• Your FICO credit scores.

• Almost anything else that’s in your bureau files -- correct or incorrect, updated or outdated -- that a lender is interested in knowing. That might range from late payments to car leases to court judgments and collection accounts that you might have disputed but that are still sitting in your files.

Typically your local loan officer hasn’t the slightest clue that his or her inquiry will trigger uninvited phone calls or mail solicitation just hours after your application.

“There are very serious privacy, identity theft and bait-and-switch issues involved here,” says Roy DeLoach, executive vice president of the National Association of Mortgage Brokers. His groups’s members are up in arms over the fast-growing trigger list activities by the credit bureaus and want them put under new legal or regulatory controls.

“It’s outrageous that simply applying for a home loan should open up a person’s sensitive personal information” to unknown, unseen and possibly unsavory individuals across the globe within hours of a consumer’s loan inquiry.

Most of the trigger lists are provided by the credit bureaus to Internet-based “lead generator” companies that then resell the information to lender customers. One lender, for example, might tell a lead generator to send only fresh data on consumers with FICO scores above 720 who’ve applied for a new mortgage in Texas during the prior 12 to 24 hours. Another lender might only want to see hot leads on subprime applicants in California -- people with FICO scores under 620.

DeLoach and other critics of trigger marketing charge that they may violate federal privacy and credit statutes. DeLoach says that under the Fair Credit Reporting Act the bureaus cannot provide consumer financial data to third-party lead generators because those firms have not obtained permission from consumers, and they're not in a position to make a “firm offer of credit” under the law.

DeLoach argues that even lenders who buy the data may violate the law because they do not possess all the information needed on a consumer to make a firm offer. They lack key data on household income, assets, and need an appraisal.

The credit bureaus say they’ve vetted their programs and that they comply with the law. Tim Summers, a vice president for Experian, said his firm’s “Prospect Triggers” program meets “all requirements of federal credit and privacy rules.

Home buyers who don’t want to receive trigger promotions or have their personal data hawked on the Internet can op out of all such offers -- for five years or permanently -- by going to or by telephoning 888-567-8688.

Published: September 11, 2006

Use of this article without permission is a violation of federal copyright laws.

Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consmer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.