The unwanted suitor

Loan applicants around the country are receiving uninvited pitches, sometimes just 12 hours after getting a mortgage quote. But now a major mortgage industry group is speaking out against the practice.

"There are very serious privacy, identity-theft and bait-and-switch issues involved here," said Roy DeLoach, executive vice president of the 27,000-member National Assn. of Mortgage Brokers. "It's outrageous that simply applying for a home loan should open up a person's sensitive personal information."

The practice targeted by the mortgage brokers is known in the industry as "trigger list" marketing -- a warp-speed version of the "prescreened" credit card offers you routinely get in your mailbox. It works like this: When your local mortgage company checks your credit to provide you with a rate quote, one or more of the national credit bureaus takes that inquiry and essentially turns it into a marketing product.

So-called lead generator companies and some lenders themselves are eager to know the identities of people who are shopping for a mortgage, and they pay the credit bureaus for those hot prospects. Generally, the prospects have to fit credit and geographic profiles that the lenders have set in advance. For example, one customer might only want the identities and contact information of people in the Los Angeles area with FICO credit scores above 700.

The credit bureaus defend their right to sell applicants' personal financial information, arguing that it is simply a zippier form of marketing "prescreened" target prospect lists for credit offers -- something they've been doing for years.

Tim Summers, a vice president at Experian, one of the three dominant national credit bureaus, said in an e-mail response that his company's "Prospect Triggers" program "provides consumers with choice and potentially significant cost savings by delivering relevant information at the decision-making point instead of weeks after a mortgage lending choice has been made."

Summers said the program meets "all requirements" under federal credit and privacy statutes.