Why trigger leads are a threat to the mortgage industry 

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The views expressed in this column are solely those of the author.

Trigger leads, the practice of selling consumer credit information without consent, have become a growing concern in the mortgage industry. Marketed as a tool for competition, trigger leads instead confuse borrowers, invite predatory tactics, and erode trust between consumers and loan officers. 

While the Senate's recent passage of the Homebuyers Privacy Protection Act represents a significant step forward, the bill must now clear the House of Representatives before becoming law. This critical juncture highlights the importance of protecting borrowers and ensuring a transparent lending process.

What are trigger leads?

Trigger leads occur when a lender pulls a borrower's credit report, prompting credit bureaus to sell this information to third-party solicitors. These solicitors — competing lenders and other parties looking to sell to prospective homebuyers — contact the borrower, often pressuring or harassing them. The Fair Credit Reporting Act (FCRA), passed in 1978, has permitted this practice under the guise of promoting competition. However, the modern context of data privacy has rendered this outdated.

In a joint letter to Congress, industry leaders — including the Mortgage Bankers Association and the National Association of Realtors — explained that trigger leads allow entities "with no relationship to the consumer" to bombard borrowers with calls, texts, and emails.

"Consumers often assume these solicitors are connected to their chosen lender," said Brendan McKay, president of the Broker Action Coalition, a grassroots advocacy group representing independent mortgage brokers across the United States. "This misconception erodes trust in the borrower-loan officer relationship. We end up spending valuable time repairing that trust instead of focusing on what matters most: helping borrowers."

A legislative victory, and how we got there

In March 2024, a coalition of nearly two dozen housing and financial organizations urged Congress to pass the bipartisan Homebuyers Privacy Protection Act (HPPA), which was first introduced in the U.S. Senate a year ago. In a letter, the coalition members emphasized that "Trigger leads should be permissible under FCRA only in limited circumstances, such as when the solicitor already has a relationship with the borrower."

The Consumer Financial Protection Bureau has also proposed rules to restrict credit bureaus from selling data to brokers, and Texas recently enacted measures requiring clearer disclosures when trigger leads are used, signaling a growing willingness to address the problem at a state level — but comprehensive federal action is necessary to provide uniform protections nationwide.

That's why the Senate's passage of the HPPA on December 17, 2024, marks such a significant victory for borrowers and the mortgage industry. The proposed law would shield borrowers from unsolicited communications during critical real estate transactions by prohibiting credit reporting agencies from sharing borrower information without explicit consent. The bill is now in the hands of the House of Representatives.

"This is a critical moment for protecting borrowers and restoring trust in the mortgage process," McKay emphasized. "We urge the House to act swiftly to ensure these protections are enacted."

How trigger leads have impacted borrowers and loan officers

Under existing FCRA rules — which full passage of the HPPA would revise — borrowers could be inundated with unsolicited communications within hours of applying for a mortgage. Offers often sound enticing but come with hidden fees or misleading terms. "I've had clients say, 'They're offering me a 3.5% rate!'" shared Alex Lanala of Range Bank. "They don't realize that rate comes with massive upfront costs. By the time they understand, they've wasted valuable time and energy."

First-time homebuyers, elderly borrowers, and non-native English speakers — who may not recognize these tactics as predatory — are particularly vulnerable. Some borrowers abandon trusted lenders, only to regret it later.

"It's not just frustrating — it's harmful," Lanala said. "These calls come at a time when borrowers are already stressed about buying a home. Instead of helping, trigger leads add unnecessary chaos and confusion."

Loan officers are equally frustrated, spending hours explaining trigger leads to clients who wrongly blame them for selling their data. "The real culprits are the credit bureaus profiting from this," McKay emphasized. "And borrowers deserve better."

Why reform is critical

If the House of Representatives fails to pass the HPPA, the mortgage industry will suffer. 

Consumers frustrated by aggressive solicitations may view all lenders as complicit in these practices, causing borrowers to "lose trust in the entire industry," Lanala warned. "We work hard to build relationships with our clients, and these practices undo that work overnight."

For professionals, trigger leads fuel a race to the bottom, where solicitation tactics overshadow integrity and service. "This isn't the kind of competition that helps borrowers," said McKay. "It's confusing, it's harmful, and it needs to stop."

The Homebuyers Privacy Protection Act represents a critical opportunity to restore trust and protect consumers. And if the House doesn't approve it? Then McKay and the Broker Action Coalition will continue to "work tirelessly to advocate for reforms that ensure a fair, transparent lending process."

Note: This story was updated to reflect the passage of the HPPA by the U.S. Senate on Dec. 17.

Coby Hakalir has been a leader in the mortgage industry for almost three decades. He currently leads the mortgage banking and mortgage tech division for T3 Sixty, one of real estate's leading management consultancies, and resides in Northern California. (Note: T3 Sixty founder Stefan Swanepoel also founded Real Estate News.)