How credit agencies sell your information : Rooftop Views

Rooftop Views

How credit agencies sell your information

You did everything right; everything your trusted real estate agent advised you to do. You were referred to a qualified mortgage professional, had a great, meaningful conversation about your short- and long-term financial goals, and were quickly pre-approved for a loan. Together, you and your agent then searched for and found the perfect home within your budget, and put in an appropriate bid. Finally, you completed the application for your mortgage and were well on your way to qualifying for your piece of the American Dream.

Then one night, while eating dinner, it began. They began! Call after frustrating phone call from fast-talking loan officers with pie-in-the-sky loan programs you hardly understood. You told them you weren't interested, but they kept on calling. Some were relentless! Some were shameless! And some were even downright rude!

How did this happen? How is it that every mortgage company around suddenly knows more about your plans to purchase or refinance a home than even your closest friends and family members?

No, your real estate agent and mortgage professional did not sell you out. In fact, doing so would be an illegal breach of your privacy. The true culprits in this all-too-common scenario are the credit agencies themselves. That's right. The same agencies that hold the key to your most vital credit information not only allow for your file to be flagged whenever you apply for a home loan, they actually sell your information as leads to the highest bidders.

Certain mortgage companies will pay top dollar for the opportunity to know exactly who is in the market for new financing. The practice results in what's known within the industry as "trigger leads." With a price tag of somewhere between $25 to $100 or more, your name and certain specifics about your credit report, including your address, phone number, mortgage history, and even your FICO score, are sold to mortgage companies which then blindly solicit your business.

Unfortunately, no legislation presently exists to prevent credit bureaus from profiting at your expense. As a trigger lead, you are simply at the mercy of any number of solicitations designed specifically to try and discredit the mortgage professionals you know and trust. Their offers may consist of bait-and-switch loan programs which could be counterproductive to your financial goals and needs. After all, you didn’t ask these people to call, you weren’t referred to them, and they know nothing about your personal financial situation. So, how can they possibly know what's right for you?

Your best option, then, is to be prepared. Prior to applying for any loan or mortgage program, be sure to visit www.optoutprescreen.com first and opt-out of future credit bureau solicitations. If, however, you're already deep into the process and it's too late to completely opt-out, request that any solicitors who contact you place your name and number on their Do Not Call list. All telemarketing companies have their own internal Do Not Call list that they must abide by.

Be sure to take down the name of both the company and the individual who made the call, and to let the solicitor know that you're doing so. This way, you will have grounds to seek action against them, should they call again. Let them know that you're aware of your rights and, more importantly, of their obligations.

If, however, you are curious about their programs, listen to what they have to say; but be prepared to ask them a question or two from the list below once they've offered you a rate that seems too good to be true.

Where did you get my information? Who gave you permission to call me, and how much did you pay for my information?

By asking this series of straightforward questions, you demonstrate that you're not an uninformed or unsuspecting mortgage applicant who can be easily victimized.
Why should I be willing to speak with you when you weren’t referred to me by someone I trust?

This question demonstrates that you're interested in a long-term relationship with a trusted advisor.
How are mortgage interest rates determined, and what impacts the rates that you are offering me today?

Many unprofessional and uninformed individuals believe that home loan rates are based on the 10-Year Treasury Note. This, however, is not true. Mortgage interest rates are actually based on mortgage-backed securities or mortgage bonds. In fact, many times these securities trade in opposite directions, and anyone who's looking at Treasury Notes to determine the lock on your loan will provide you with inaccurate information.

Asking this question will demonstrate that you're aware of the fact that mortgage rates can change frequently, even hourly, depending on economic news and market volatility. If they can’t share this information with you, what else might they be leaving out?
What impact does the Federal Reserve have on the rate I will be paying for my first mortgage with you?

The answer here is that it does not. The interest rates that you pay are impacted by the bonds and securities markets. When the Fed changes short term rates, the "Fed Funds Rate" or the "Discount Rate", only rates for items such as Home Equity Lines of Credit (HELOCs), credit cards, and other similar loans are directly impacted.
What are the specific closing costs associated with the rate and program you're offering me today?

Many times, interest rates will be quoted with origination fees or discount points included in order to deliver the attractive interest rate being offered. While in some cases your situation may warrant paying these fees to get a better rate, you should always be made aware of these fees and options up front. Also, be aware of any fees disguised as a "Funding Fee." In some cases, these fees have been hidden in order to deliver what seems like an exceptionally low rate with "no points or fees."