Recently I had a client I was working with who called me about 3 days into the loan process and asked me if my lender had called her. I said I doubt it, the loan hadn’t even been approved yet and in 6 years, I have never had nor heard of a lender calling a borrower in the middle of the process. (if at all) She said that she had received a call from someone saying her loan documents were ready and she could schedule a time to come in and sign them. She also told me that in the 3 days since I had pulled her credit as part of the loan application process, she had received no less than 10 phone calls from mortgage companies claiming they knew she was looking for a mortgage and they would be able to offer her a better deal.
What’s happening is the result of a “mortgage trigger lead”. It works like this, a mortgage company can ask to buy any persons name and personal info the minute that persons credit is pulled by another mortgage company. Imaging that! How better to qualify a person as a mortgage lead than to know that they have just had their credit pulled by your competition. The only problem is that the technique that is commonly used to lure someone away from there mortgage person is to promise them a better deal. Most of these promises are made to the borrower before the new mortgage person has done any qualifying and generally don’t pan out. Bottom line is that if you are working with a reputable local mortgage professional that you may have even been referred to, you are probably getting a good deal on your loan. The best defense against these mortgage pirates is to ask them to send you a Good Faith Estimate and a letter guarantying the interest rate and closing costs won’t change at the closing. Odds of any of these “phone room wonder boys” complying with that request are slim to none and you can get them off your phone and finish your dinner.
This whole thing really makes me mad but it should make you even more mad. In this age of privacy how is it that the credit bureaus can sell my name, credit score, loan amount, total consumer debt and other factors to any mortgage company with a ton of money.(one such marketing company charges $25,000/month for access to these leads) How is it that this information that we all thought was private is readily available to anyone to purchase? What is worse is the quality and caliber of the people who are calling us armed with this personal and private info. Using tactics like telling you your loan docs are ready, or they can beat any deal you have seen, before they have even qualified you, these mostly young kids, most of whom have never owned a home or much else for that matter, are desperately trying to close your loan as fast as they can before you figure out what is really going on. Generally these sweat shops or mortgage phone rooms are simply dialing for dollars hoping to stumble onto the one or two borrowers referred to in the famous quote, “there’s a sucker born every minute”.
Sadly much of the sub prime mortgage industry is based on that phrase but the fact remains that the credit bureaus are making it even easier to exploit that point by giving unscrupulous characters enough private information about us to make it seem as if they are the company we are working with. Fortunately for mortgage professionals who get most of their business from repeat clients and referrals, this ploy rarely results in the loss of a client, but it does non-the-less bring even more confusion to an already complex process.
I’m lucky, as far as I know, I haven’t lost a client yet to one of these mortgage pirates but what concerns me is the increasing speed at which the calls start and the increasing number of calls. I almost feel bad for the sucker mortgage companies who are buying these leads. If they knew how many other mortgage pirates were also sold the same lead, they may be inclined to build a business around delivering on their promise and fostering long term relationships. Imagine that!
