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Applied for a Mortgage? Beware of Scam Letters

Posted on April 1, 2020 by Ray Williams (NMLS #216267).

When it comes time to purchase a home, refinance your mortgage, or move into a new rental property there is a lot of important information to consider. Large financial decisions are always going to involve a certain amount of tension, but there is also plenty of excitement on these occasions. If you have done any research on the important factors for mortgages and homeowner financing, then you probably already know where the process can become difficult or stressful.  What you may not know is that simply by beginning the process in the first place, you may be opening yourself up to trouble from mortgage trigger leads. These leads are really only a concern if you don’t know what they are and why they are a problem, so a brief discussion can help you avoid a lot of trouble in the long run.

If you have ever made a major financial purchase in your life then you probably know at least a little bit about credit checks. There are only a few major credit bureaus operating in the United States, and they play an important (but imperfect) role in the financial system. Credit bureaus are used by different institutions, such as banks and car dealerships, to perform credit checks on prospective buyers. By combing through your financial history, the bureaus can recommend appropriate loan conditions and interest rates on large purchases, or decline the purchase agreements altogether. In an ideal world, credit bureaus would ensure that people only enter into loan agreements and purchases that make sense for them and the seller.

Our world is not perfect, and there are plenty of issues to be concerned about when it comes to credit bureaus. One of the biggest problems is the use of mortgage trigger leads. If you go to a bank to apply for a mortgage loan on a new home, the bank will contact credit bureaus to perform a check on your financial history. This information, you might hope, would stay private between the bank and the bureau – but it doesn’t. As soon as credit bureaus know that you have applied for a loan, they will sell that information to a variety of third parties. These other businesses could range from any number of other mortgage providers, of varying degrees of legitimacy. These ‘tips’ on prospective buyers are known as trigger leads.

Unlike telemarketing calls, there are a lot of people who are not aware that mortgage trigger leads exist. As a result, unassuming homebuyers can be lured into unscrupulous agreements with shady loan providers who smell blood in the water. Because it is rare to make such large financial decisions on a regular basis, most people simply do not know to be wary of trigger leads.

If you receive any phone calls, emails or solicitations following a loan application, always use shrewd judgment. Or work with experienced professionals like Mortgage Maestro Group to avoid any unwanted solicitations. In the Denver Metro area and have questions? Contact us here.

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