Tired Of Mortgage Spam Texts? This New Privacy Law Could Finally Put A Stop To Them
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below.
If you’ve ever applied for a mortgage and immediately found your phone flooded with unsolicited calls or texts from other lenders, you’ve experienced what’s known in the industry as a trigger lead.
These leads are generated when a hard credit inquiry signals to credit bureaus that you’re shopping for a mortgage, often resulting in a sudden barrage of offers from companies you never contacted.
Starting March 5, a new federal law — the Homebuyers Privacy Protection Act — is set to change that.
Don’t Miss:
The HBPPA limits the circumstances under which credit reporting agencies can provide your credit report to third parties in connection with a residential mortgage. Under the law, your information can only be shared if:
-
The lender has your explicit consent, or
-
The lender already has a relationship with you, such as being your current mortgage servicer or having an existing account.
In addition, any lender accessing this information must be making a firm offer of credit or insurance, which must be documented. This represents a significant shift from the previous system, where lenders could buy lists of potential borrowers as soon as a hard credit pull occurred — without consent.
For homebuyers, the law means more control over personal financial data. No longer will applying for preapproval automatically open the door for competing lenders to reach out. Borrowers can now expect:
-
Fewer unsolicited calls, texts, and emails
-
Greater privacy protection
-
A clearer understanding of who has access to their financial information
Trending: Forget Flipping Houses—This Fund Lets You Invest in Home Equity Like Wall Street Does
And while trigger leads aren’t completely gone, the HBPPA makes them much harder to access. Only lenders with permission or a pre-existing relationship can obtain them.
For brokers and lenders, this law changes the game. Previously, trigger leads could undercut brokers by letting other lenders swoop in at the last minute. Now, mortgage professionals must focus on relationship-building and trust, rather than relying on purchased leads.
“Most brokers are excited about the recent law change, as it was typically the larger companies purchasing trigger leads,” Kevin Andersen, CEO and founder of Soft Pull Solutions, told Benzinga. “Brokers will see this as a win for their business and the consumer.”
