Trigger lead crackdown: What it could mean for your pipeline.

For the fourth meeting in a row, the Fed decided to leave interest rates unchanged. The rate remained at 4.25 – 4.50%, which is moderately restrictive.

Chair Powell noted that U.S. economy remains strong and that they are “well positioned to wait” before making any changes. According to the dot plot, the FOMC is currently forecasting two rate cuts this year with the next rate decision coming on July 30.

Housing starts – the number of new residential construction projects – fell nearly 10% month-over-month to an annualized pace of 1.26 million units. This represents a 4.6% decline year-over-year and is the lowest level since May 2020.  Builders are scaling back new-home construction as affordability and demand concerns continue to weigh on their sentiment.

Mortgage trigger leads are alerts generated when a borrower has their credit pulled during a mortgage application. Credit bureaus sell this data in real time to competing lenders, who then aggressively market alternative loan offers — often within hours — in an effort to win the business away from the original lender.

This practice, which began in the early 2000s, has become a common marketing tactic in the mortgage industry. Over time, the usage of trigger leads has grown rapidly, and their usage has been controversial.

• Supporters argue that trigger leads promote competition and give consumers more options.

• Critics say they result in lead-poaching, overwhelm borrowers with unsolicited communications, and violate consumer privacy.

Now, a bipartisan effort in Congress is aiming to rein in the practice. Legislation has been working its way through the government and marked a key milestone by clearing the Senate unanimously on June 12.

The Homebuyers Privacy Protection Act (S.1467) aims to limit how and when credit reporting agencies can share consumer credit reports that are triggers during the mortgage application process.

• Who would benefit?Loan officers and lenders who originate credit pulls and want to protect their pipeline.Homebuyers, who would enjoy greater privacy and fewer intrusive calls or texts.Local and community lenders, who often lose borrowers to larger firms that use trigger lead data aggressively.

• Loan officers and lenders who originate credit pulls and want to protect their pipeline.

• Homebuyers, who would enjoy greater privacy and fewer intrusive calls or texts.

• Local and community lenders, who often lose borrowers to larger firms that use trigger lead data aggressively.

• Who might be affected? Lead aggregators and large lenders that rely on purchasing trigger leads.Consumers seeking ultra-competitive mortgage offers, who might lose a channel of price discovery – albeit one with strings attached.

• Lead aggregators and large lenders that rely on purchasing trigger leads.

• Consumers seeking ultra-competitive mortgage offers, who might lose a channel of price discovery – albeit one with strings attached.

The bill now moves to the House of Representatives for a vote. If the House passes the same version as the Senate, the legislation will go directly to the President for signing into law.

With bipartisan support and growing concern over data privacy, many industry insiders are optimistic that the bill could be enacted before the end of summer – potentially reshaping mortgage marketing and lead generation nationwide.

Purchase season is here. Stay prepared by engaging with industry leaders and discovering what’s next. We’ll be at these top events – let’s connect!

• July 10: Ultimate Mortgage Expo – New Orleans, LA (Free registration with code RocketFree)

• July 17: Arizona Mortgage Expo – Phoenix, AZ (Free registration with code RocketFree)

Join us for meaningful conversations, valuable insights, and new opportunities to drive your business forward. We look forward to seeing you there.

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