CHLA calls on CFPB to take action against trigger lead calls

The Community Home Lenders of America (CHLA) on Monday submitted a letter to Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra, urging the agency to more forcefully go after trigger lead solicitations. To cement the point, CHLA is calling such solicitations “junk calls,” echoing the language of the campaign the Bureau has waged against “junk fees.”

The letter cites three specific practices that it hopes the Bureau will focus on, which it and its members believe “are abusive, anti-consumer, and potentially illegal.” The first is a concern that mortgage brokers are making trigger lead solicitations, which is troubling to the organization since they “do not have the mortgage banking capability of closing a loan.”

Since there is a legal requirement saying that trigger lead solicitations must be a “firm offer of credit,” CHLA said, it does not “see how it is possible for a mortgage broker to meet the ‘firm offer of credit’ requirement in such situations.”

Secondly, CHLA says that its members have been made aware of “junk call trigger lead solicitations that either misrepresent or falsely imply that they are calling on behalf of the existing mortgage lender that the borrower is currently working with,” the letter said. “This is unethical, anti-consumer, and potentially illegal.”

Finally, members believe that in some cases, individual loan officers are making trigger lead calls without the consent of the company they work for, which is “problematic,” the letter said.

That’s because the employing lender “is not able to properly supervise language and practices used by such loan originators,” CHLA said.

In terms of what it would like to see, CHLA says it hopes the CFPB will encourage consumer reporting of trigger lead solicitations.

“CHLA requests that the CFPB: encourage consumers to submit complaints regarding abusive trigger lead solicitations, clearly identifying what practices are not permissible,” to identify “mortgage brokers or lenders that frequently engage in impermissible actions,” and to take “such actions against brokers or lenders as are appropriate to stop such practices.”

Earlier this year, a bipartisan duo of members in the U.S. House of Representatives introduced a bill targeting the “abusive” uses of mortgage trigger leads, a companion bill to a previously-introduced bill in the U.S. Senate. It was referred to the House Committee on Financial Services but has not progressed any further as of July.

Mortgage Bankers Association (MBA) President and CEO Bob Broeksmit announced the organization’s support of the measure in concert with the previously introduced Senate version.