On October 6, GAO released a report to congressional committees finding that mortgage “trigger leads” may have offered homebuyers limited comparison-shopping benefit, and that new restrictions, if effectively implemented, could curb unwanted solicitations while leaving room for homebuyers to shop for loans. The Homebuyers Privacy Protection Act (HPPA) (previously covered by InfoBytes here), in part, directed GAO to conduct the review. Trigger leads arise when a lender pulls a homebuyer’s credit report and a credit reporting agency then sells the homebuyer’s name, contact information and credit score to other lenders and brokers. The HPPA amends the FCRA to limit residential mortgage trigger leads to: (i) lenders or brokers that originated or service the homebuyer’s current mortgage; (ii) insured depository institutions or credit unions at which the homebuyer holds an account; and (iii) parties that certify they have the homebuyer’s authorization.

Based on federal survey data from 2022 through 2024, GAO estimated that no more than 3.5 percent of homebuyers may have obtained a loan through a trigger lead offer, and that 45 percent seriously considered only one lender or broker. Among the drawbacks, homebuyers could receive 30 or more messages, according to the CFPB. Stakeholders also reported marketers promoting rates that applicants could not ultimately obtain and posing as the lender the homebuyer had originally approached, raising privacy concerns. Because the HPPA restrictions took effect in early March, GAO said it is too early to gauge their effects. Even so, some stakeholders told GAO the restrictions could substantially reduce solicitation volume, though GAO noted that lenders with existing relationships can still buy leads, and that homebuyers may still shop by researching lenders before applying or opting in to solicitations.