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.

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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. 

Advocacy groups are pushing for reform, with the Homebuyers Privacy Protection Act offering a promising solution.

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, permits 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 However, the modern context of data privacy has rendered this outdated.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.”

Impacts on borrowers and loan officers

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Within hours of applying for a mortgage, borrowers may be inundated with unsolicited communications. 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.”

This confusion is particularly harmful to vulnerable groups like first-time homebuyers, elderly borrowers, and non-native English speakers, who may not recognize these tactics as predatory. 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.”

A call for legislative reform

Efforts to curb trigger leads are gaining momentum. In March 2024, a coalition of nearly two dozen housing and financial organizations urged Congress to pass the bipartisan Homebuyers Privacy Protection Act. This legislation would restrict the sale of consumer information, shielding borrowers from unsolicited communications during critical real estate transactions.

As the coalition letter noted, “Trigger leads should be permissible under FCRA only in limited circumstances, such as when the solicitor already has a relationship with the borrower.”

On the regulatory side, the Consumer Financial Protection Bureau (CFPB) has proposed rules to restrict credit bureaus from selling data to brokers. While still under review, it reflects a growing acknowledgment of the need for reform.

Adding to this momentum, states are stepping in to protect consumers. Texas recently enacted measures requiring clearer disclosures when trigger leads are used, signaling a growing willingness to address the problem at a state level. While this is a step forward, industry leaders argue that comprehensive federal action is necessary to provide uniform protections nationwide.

Long-term implications for the industry

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Without further action on trigger leads, 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.”

A path forward

The Broker Action Coalition (BAC), formed to protect borrowers and promote fair competition, has been instrumental in raising awareness about trigger leads and uniting industry voices to push for legislative change.

“Our mission is to protect both consumers and the mortgage professionals who serve them,” McKay explained. “We work tirelessly to advocate for reforms that ensure a fair, transparent lending process.”

Another powerful advocate is the Mortgage Bankers Association, but individual loan officers also play a key role. McKay urged professionals to stay engaged: “When advocacy groups issue a call to action, respond. Your voice matters.”

Educating borrowers is equally critical. Loan officers should proactively inform clients about trigger leads and how to navigate them. “We’re the first line of defense,” said Lanala. “If we explain what trigger leads are upfront, it can help borrowers feel prepared and reduce confusion.”

The Homebuyers Privacy Protection Act represents a critical opportunity to restore trust and protect consumers. By supporting this legislation, the mortgage industry can promote a fairer, more transparent process — one that prioritizes borrowers over aggressive solicitation.

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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.)