Mortgage Applications: Not as Private as You Think!
Much of the information on this website has been about informing consumers how their credit history is used by the credit bureaus and the untold numbers of companies they sell it to. When people apply for something as weighty as a mortgage, most would think the information they provide their loan officers/brokers is confidential and private. After all, mortgage applications are one of the most detailed summaries of a consumer’s overall financial picture.
Unfortunately, the credit bureaus and the marketing companies they sell to are usually privy to that information within hours. A current marketing trend is for credit bureaus to create lists of those that have had their credit checked by any type of mortgage company. They then sell that information to other mortgage companies or companies that market to mortgage companies. The potential mortgage client is then bombarded with ad campaigns, teaser rates, and the works.
I found this out quite by accident. As a broker, I regularly access credit reports for my clients’ loan applications. Due to my knowledge of the perils of identity theft, I routinely check my own credit several times a year.
After pulling my own credit report last month, I received a phone call from my current mortgage company asking me why I was planning to refinance. When I replied that I wasn’t, they told me they received a report from the credit bureaus saying I had applied for a new mortgage. When I questioned them further, I was finally told they pay the credit bureaus to inform them anytime one of their mortgage customers has their credit pulled by another company. They use this information for “client retention” purposes.
In addition to the call from my current lender, I have been inundated with offers of mortgages and home equity lines with ridiculously low teaser rates. Were I not in a position of reviewing lending rates daily, it would be easy to be confused or mislead by these unrealistic offers. In my office, I began receiving solicitations selling “mortgage leads for potential loan applicants that are within 12 hours of the initial credit check.”
The result, it tells me just how many times my credit information has been sold and the corresponding increased risk of theft of my identity. Unless the buying and selling of credit histories is limited or stopped, the risk of identity theft for all consumers is like living with a cancer in remission—you never know when it will raise its ugly head in the future or how debilitating it will be when it does.