Sunday, March 25, 2007

Your mortgage application can 'Trigger" a flurry of sales calls

Your guides just learned of a practice by the mortgage and credit reporting industries we had not heard of before. Home buyers that talk to a mortgage broker or baker can unleash a barrage of sales calls from other lenders trying to tempt you with competing offers.

How can this happen?

If you're out shopping for a home, and you diligently follow the advice of your Realtor or Morgtgage Broker by calling for a pre-qualification or pre-approval letter, your lender will pull your credit report.

The credit bureaus know that a mortgage company has requested this info on you and accurately presume that you are shopping for a loan.

The credit bureaus also have "Lead Generator" affiliates that make a hefty profit on providing leads of ready, willing customers out shopping for particular products. These "Lead Generator" companies can even match loan prospects based on criteria such as location, credit score, income or other factors.

The names and credit profiles are then sold to lenders that subscribe to these programs, and the calls start rolling in. Often within 1 day of your first call to your mortgage broker.


Some steps you can take to protect yourself from these practices:

  • Opt Out. Consumers can cut off all pre-screened credit solicitations - whether for mortgages OR pre-approved credit cards - by opting out. You can visit on the internet or call 1-888-5-OPT-OUT. According to the Federal Trade Commission your request should be processed within 5 days.
  • Make sure your phone numbers are on the National Do Not Call Registry. Visit or call 1-888-382-1222 to add your numbers to the registry.
  • If you experience problems, suspect "Bait and Switch" tactics or are otherwise harrassed by callers, you can file a complaint with the Federal Trade Commission at

Your Guides' Advice - make these calls first before calling your mortgage broker this week.