The Homebuyers Privacy Protection Act (HR 2808) changed life for all Americans without most of them even knowing it last year. Have you ever applied for a mortgage, and then all of sudden, your phone won’t stop ringing with lenders promising you the deal of the century? You wonder how they know so much about your personal situation. You wonder if you are supposed to reply to any of these folks. Maybe you wonder if there is a problem with your loan in process. No matter what, you probably felt annoyed, possibly scared, or confused. Lame, right?
What actually happened was that your credit inquiry information was sold by the credit bureaus as a “trigger lead.” No, your lender didn’t do anything wrong. No, your information wasn’t leaked. Yes, it shouldn’t happen if you had opted out under the Fair Credit Reporting Act’s (FCRA) online offering (optoutprescreen.com).
Yes, it seems like this is something that shouldn’t happen in today’s multi-factored, privacy-focused financial policy world. Well finally, the Homeowner Privacy Protection Act has changed this.
Previously, credit bureaus were allowed to sell certain points of data to various lenders — your name, phone number, and amount of credit requested, to name a few. Because of this, I know many loan officers that would input a fake phone number before running credit. Some would input $1 for the loan amount requested, or input the client’s address as 1234 Main Street, to defer accurate data from preying salesmen.
Now, the FCRA permits lenders to acquire these types of leads only if the lender intends to extend a “firm offer of credit” to the consumer. What is that? Well, it means that the folks buying this data must feel they have enough information to genuinely offer credit based on the information at hand. And anyone who has applied for a mortgage loan in the last 10 years knows that there’s way more than the credit report analyzed to render a credit decision.
This act took effect March 4 of this year, and companies are required to report back on data shared by September of this same year. What is curious to me is what we will see going forward with data shares and consumer demand. Many employers no longer have us lenders call payroll to verify employment, but instead use online processing systems. With permission, we can work with Mastercard to run a “Finicity” report that gives data on your assets and cash flow over the past 24 months. As data continues to be amassed, analyzed, and turned around for quick review, what portion of this collected data will be sold for profit, versus retained for analysis? This act is a step is the right direction to protect sensitive information, inquiries, and intellect. Let’s hope, at least, that everyone’s favorite caller ID, Potential Spam, finds a Netflix show to binge instead of dialing for dollars.
Austin Lampson is a licensed mortgage professional and branch manager of Origin Point Mortgage. She has spent the last quarter-century helping her clients balance math and emotion to achieve their financial goals. Reach Austin at (805) 869-7100, austin@austinlampson.com, or visit austinlampson.com.
