Minnesota Mortgage Blog - MN Mortgage and Real Estate News

Banned in Minnesota: Trigger Leads

One of the better pieces of legislation to come out the Capital this year is a law banning the sale of what are known as "trigger leads".

The new law prohibits consumer reporting agencies or any other business entity from selling or exchanging with a third party information that a person’s credit history was requested in connection with a mortgage loan application.

In other words, until today, any time you applied for a mortgage, or had a mortgage lender run your credit report, that information, along with whatever other data was available in your file (credit score, current address, telephone number, loan balances, etc.)  was immediately sold by the credit repositories - Experian, Equifax, Trans-Union, to all sorts of bad lenders from coast to coast. They would then use that data to solicit you for a loan, often using shady bait-and-switch tactics to trick you into doing business with them. 

The credit bureau's defend the practice by saying it gives more "choice" to the consumer.  The realtity is it was a money making(as if anyone would choose to be hounded by lenders who will try to trick them.)

It WAS a perfectly legal practice in Minnesota.  The good news is it no longer is here, and for the rest of the states, you can opt-out, so your name is not included in these trigger lists.

Though we have always recommended shopping for a mortgage lender to work with, this should be done on your terms, with a lender of YOUR choice, as opposed to someone who paid good money to get your name, then would say or do anything to recover their costs.

Trigger leads are a horrible practice, a breach of consumer privacy, and need to be ended nationwide as soon as possible. 

The Law

Sponsored by Rep. Kurt Zellers (R-Maple Grove) and Sen. Warren Limmer (R-Maple Grove), a new law prohibits consumer reporting agencies or any other business entity from selling or exchanging with a third party information that a person’s credit history was requested in connection with a mortgage loan application, unless the third party holds an existing mortgage loan on the property. Most of the law takes effect Aug. 1, 2007.

The law also contains provisions for:

• increasing the dollar amount and other aspects of the homestead exemption from creditors, and provides for inflation adjustments;

• prohibiting real property from being subject to execution under certain conditions involving the homestead or other property rights of non-debtors, such as the spouse of the debtor;

• modifying provisions relating to the sale of homestead property; and

• building contractors to bring action against subcontractors for contribution or indemnity. This provision is retroactive to June 30, 2006.