Or why your current
mortgagee, the company that didn't spell your name right on last
month's statement, is suddenly your new best friend? Rent To Own Properties!!
The
answer is credit "triggers," a highly profitable sideline for all of
the big three credit collection bureaus, (and business financial analyst
Dun & Bradstreet is also a player) although one of them seems to be
exploiting their product with great intensity over the last few years.
Lenders
(and others, more about this later) can subscribe to a trigger service
with one or more credit bureaus. Depending on the parameters that the
subscriber chooses, and there are over a dozen to chose from, it will be
instantly notified if there are changes in the credit profile of
current customers. These triggers may be employed by subscribers as risk
alerts, collections assistance, and more recently as marketing
opportunities. Rent To Own Properties!!
In
collections, for example, a triggering event might be a change in a
person's or business's credit history such as a payoff of some
delinquent debts that might indicate renewed liquidity or information on
a new location for a missing debtor.
A
risk alert trigger would be one that indicates that a customer is
taking on substantial additional debt or begins to exhibit a pattern of
late payments or even of minimum payments on a number of accounts. This
is the type of trigger that can result in reduced or even closed credit
lines or a sudden increase in interest rates.
Triggers
have been available to lenders for years although new technology is
morphing them into a totally new type of product, one that can be
customized by combining a number of parameters and is available to
subscribers nearly instantly. Experian permits a lender to submit a list
of names (probably from its current portfolio) to be monitored when for
credit shopping or can ask that a list of names (not necessarily
existing customers) that match a specified profile be generated on a
regular basis. Marketing, risk, and retention triggers are now available
on a daily, weekly, up to quarterly cycle.
It
is in the marketing area that Experian at least has begun to strongly
push its trigger products. While the marketing sector has been around
for several years, the sales targets have changed and that could be
disconcerting, particularly to the consumer shopping for a mortgage
loan. Rent To Own Properties!!
The
credit bureaus have provided trigger service to mortgage services for
some time; and in the throes of the refinancing frenzy this was a
popular product. A service wanted to know if a customer was seeking
additional credit in order to approach him and try to retain the
mortgage business themselves through a refinance or to cross-sell other
products such as mortgage insurance or credit cards. As the refinancing
boom has waned, however, the credit bureaus are now offering the trigger
services to all comers. In other words, they are selling mortgage
trigger leads.
Experian
touts its product on its website thusly: "you can quickly and precisely
find credit worthy customers with recent credit activity who are most
likely to respond to your specific offer... And who are the kind of
credit worthy customers you would like to attract." Rent To Own Properties.
In
other words, if your mortgage customer is shopping around to refinance,
we will alert you so you can take action to retain that business. And
we will also notify you if a total stranger who meets your parameters of
location, credit score, etc. appears to be seeking financing. Rent To Own Properties!!
Perhaps
the borrower will get a better deal - in the words of the Lending Tree
ad - "when banks compete you win." But there are a couple of troubling
aspects. First of all, the lender who is initially seeking your business
is paying for the credit report that triggers the trigger putting his
very own mortgage lead on the open market to be sold as a credit trigger
lead for profit to his competitors.
Second, it is yet another in the
endless examples of how an individual's privacy is ignored every day.
Rent To Own Properties Edward
D. Murphy, writing for the Portland Press Herald and Maine Sunday
Telegram did an excellent report on this practice in mid-June. He
maintains that all three of the big credit bureaus - TransUnion and
Equifax in addition to Experian, are selling these kinds of trigger list
leads. As stated above, we found only Experian actively marketing the
product on line.
Edwards
quotes a mortgage broker in Maine who is opposed to the practice of
selling these leads as saying that brokers in Maine would typically pay
about $15,000 to sign up for the service plus another $10,000 to $12,000
per month for the lists.
The
law requires that anyone contacting a consumer from such a lead do so
with a firm offer of credit and Experian's website specifies that
requirement for lead purchasers. The Edward's article, however, quotes a
consumer agency head in Maine as saying the calls to consumers are
"more in the nature of fishing expeditions...'tell us what you're
looking for and we'll see if we're doing better.' Rent To Own Properties!!
We
are also unclear as to how the mortgage broker who purchases the lead
gets around the Do Not Call regulations that allow very few exemptions
but one is a prior relationship between the caller and his target.. Is a
borrower's involuntary relationship with the credit bureau enough to
satisfy this requirement?
There
are also ads online for several companies marketing leads that sound
very much as though they must be coming straight from a credit bureau.
One of the most visible marketers advertises thusly:
"(Our Products) are ideal for:
-
Automotive lenders (Rent To Own Properties)
-
Banks (Rent To Own Properties)
-
Credit card issuers (Rent To Own Properties)
-
Mortgage and home-equity lenders. (Rent To Own Properties)
-
Retailers Rent To Own Properties!!
Now
you can dramatically increase the response rate to your pre-approved
credit offers by reaching consumers at the precise time they actively
are shopping for credit. With (our product), you can identify
opportunities as they occur and make firm credit offers, as often as
daily, to consumers who meet your credit criteria."
One
has to figure that these sales leads are available not only to lenders
but also to companies who then resell them, probably in smaller packages
to those seeking leads. Rent To Own Properties!!
We will try to get some answers from the credit bureaus about some of these issues. Rent To Own Properties!!
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