
Mortgage Connects an MGIC Podcast
On Mortgage Connects, we explore the minds and experiences of mortgage industry and lending innovators to bring our audience candid viewpoints on critical mortgage industry developments and influential insights about the unique challenges that lie ahead. Our hosts interview top mortgage professionals and thought leaders across the industry – from proven LOs to established CEOs – who have wide-ranging expertise to provide the best insights into market trends, best practices, marketing and referral strategies, training opportunities, and the future of the mortgage industry.
Mortgage Connects an MGIC Podcast
The latest credit updates from Mike Olden
MGIC’s Alexis Panaro brings you the highlights of a credit conversation with Mike Olden, American Reporting Company's (ARC) vice president of sales & education. Mike shares insights on:
- Trigger lead basics
- Why and how to encourage borrowers to opt out from solicitations
- What drives credit report costs and strategies to mitigate those costs
- Current medical debt reporting thresholds and delays
- Student loan delinquency rates and servicer options
For a recap of this episode and quick access to related content, including the full webinar recording, visit mortgagesconnect.com. There, you can subscribe for email alerts so you'll be among the first to know about new episodes or other resources.
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Welcome to Mortgage Connects by MGIC, bringing you the latest insights from top mortgage professionals around the industry. I'm your host, Alexis Panaro. On a recent MGIC special event webinar, I spoke with Mike Olden, VP of Skills and Education at American Reporting Company, about the latest on trigger leads, credit reporting costs, and medical debt. Today, we're bringing you the highlights of that conversation. If you'd like to hear more, go to MGIC.com slash training to access the full webinar recording. A little bit about Mike. At ARC, Mike's primary responsibility is enhancing client partnerships and developing new business for credit reporting and appraisal management services. Mike has worked in the mortgage banking industry since 1984, and he's been an American reporting company since 97. He currently helps develop and deliver educational programs related to credit reporting and credit scoring for clients, nonprofit housing partners, and first-time home buyers. With that, let's get into those credit highlights. We are going to start with trigger leads. So, Mike, if you could just for a moment explain what a trigger lead is and the difference between trigger leads and pre-screen offers.
Mike Olden:Sure, sure. So, you know, trigger leads, we've we've our industry has been uh uh really at odds with this over the last couple of years. Uh, you know, it's it's interesting when it was really busy a few years ago. We didn't hear too much about it. Uh as our industry went into this valley the last two and a half, three years, uh, we we've seen it uh come up to the surface and and really be an emphasis uh on here. So trigger lead basically is, and it's not just unique to the mortgage industry, but when a consumer applies for credit, but well, we're in the mortgage industry. So when they applied for a mortgage, if they had not opted out, they were unprotected. And the bureaus own our data, uh, and they were allowed under the Fair Credit Reporting Act, I think it's section 604 in the FCRA, to sell that information either directly or through other third parties. Uh now, American Reporting Company, uh, we've never sold trigger leads. Um, you may want to ask your own provider. You know, sometimes they do as a source of revenue. But when when that credit report was pulled, it sent a trigger to those other lenders, your competitors who were who were buying those, that uh Mike Olden just applied for a mortgage. I'm gonna reach out and call him, or I'm gonna send him an email uh to see if I can get that business uh from him. Uh now a pre-screened offer, uh, probably many of us here, we've received those in the mail. Uh, dear Mike, you're pre-approved for a $50,000 credit card. What they've done there is still they've gone to the bureaus. They have said, we want everybody in the 98199 zip code in Seattle whose scores fall between this and this. They have no bankruptcies in the past 12 months, no mortgage weights, uh, their credit card balances are below X number of dollars, and they purchase that list as long as that consumer hasn't opted out. So while they're similar, they they are different. One was specific to an action taken by the consumer. The other one, the consumer is receiving those based on information in their file. One important thing to remember, whether it's a trigger lead or a pre-screen offer, the company making that contact has not seen the consumer's full credit file. The consumer didn't give them permission. They just know there are certain attributes that fit into that category that they want so they can market to that consumer. Uh so those are the those are the differences there. Um, but the exciting news is uh triggerly legislation was was passed uh uh uh recently. Uh the president signed it uh a couple of weeks ago. It goes into effect on March the 4th, 2026. So there is a time, a time frame when consumers could still be susceptible. Uh, I would encourage each of you to communicate often to your database, uh, to you know, uh encourage your real real estate partners or financial planning partners to share the opt-out information, the links, until that legislation goes fully into effect. And we're going to share these sites with you. So opt-out pre-screen is for mail, do not call.gov is for phone calls, you know, with with the tremendous efforts of uh Representative Torres in New York, uh, Senator Reed out of Rhode Island, uh uh Congressman Rose, Tennessee, and our friends at the Mortgage Bankers Association, you know, uh Bill Kilmer and Pete Mills and their teams, uh working together uh to eliminate these. And I think it'll make all of our jobs much easier.
Alexis Panaro:And how quickly does an opt-out take effect?
Mike Olden:You know, it usually is just a few days, but on the on the do not call, if you go to their website, uh it's usually registered within you know very short amount of time. But they do stayed on there, I believe they still stayed on there, that that could take up to 30 days to completely cycle through because lenders may have purchased that information before the consumer opted out. So I think in our industry, it's always a good idea to encourage borrowers to do that. Put make that a regular part of your communication to borrowers. Uh, is hey, are you tired of unwanted solicitations? Question mark. Here's where you can go to opt out. So we we are preventing that long before they reach us.
Alexis Panaro:All right, let's talk about credit reporting costs. So um, you know, I I did see some people asking questions about, you know, how credit reports are getting expensive. Um, will will the cost for a credit report increase due to the um opt-out or sorry, due to the trigger lead legislation going into effect? You know, will that increase uh credit reporting costs? Um and then any tips on how lenders can reduce these costs?
Mike Olden:Yeah, well, to the answer to the first, I I I don't know. I think it depends on how the industry shakes out. So we we we want to remember the bureaus own the data. Uh it's it's their data to to to to to sell. Either at least one of them can sell directly. The other two really don't get into that space, but you know, they that they sell it, resell it through companies like American Reporting Company and our peers in the industry. Uh, and there's other factors that filter in, you know, FICO score costs, uh, vantage score costs. And right now, vantage and FICO are the same cost. Uh, it used to be that that vantage was was much less, but in the last couple years, uh, you know, the uh the water that those two boats are floating on is is the same level uh there. But I think there are strategies for lenders to use. Uh probably the the best and easiest ones to implement is a is a credit cascade. And lenders can set criteria, minimum standards for their borrowers, uh, both underwriting items and credit score items. So underwriting items, uh no bankruptcies in the last 24 months, uh, no late payments in the last 12 months, uh, uh no collections, uh, uh credit card balances under uh under $20,000, whatever attributes you want to come up with. And they could combine that with, you know, hey, we we don't want any credit scores below 600 or 620 or 580, whatever their determining factor is. If if that initial report doesn't hit those minimum standards, uh the other one or two bureaus is not pulled. So that's a that's a way for for lenders to save costs on credit reports. I feel you could you could certainly save theoretically 66% of your cost by stopping at the first bureau. First bureau didn't meet my criteria, stop. But if you pull two bureaus, you're assured one of those scores is going to be your mid-score. And and that's what we still look at is the mid-score. But you're still saving 33% of your costs, and that's that's a way to do it. Uh, and then have regular conversations with your credit reporting provider. Uh, you know, we have multiple conversations a year with with our clients, and you know, we're getting into almost the fourth quarter. That's when the bureaus are gonna uh deliver their their costs for for 2026. Uh everybody on the call is probably familiar with those. Uh, but maintain a good communication uh with your credit reporting providers, and you know, we should be your business partners, uh, not just a vendor, but a business partner where we're working together uh to collaborate and come up with solutions that benefit everybody. And uh, you know, I think that's that those are probably the for me the two best ways of of reducing your your costs. The other way is you know having canted conversations with your borrowers, knowing knowing the borrower's current credit situation and their income situation, and then you know, in conjunction with that, you know, maybe pulling a single bureau soft hit credit report, and you can you can pull those that don't require a firm offer of credit. And a lot of times those are you know under $20. And and that's an economic strategy for working with borrowers who are ready today, and those who aren't, now you're just creating a pipeline of future borrowers, and you can continue to nurture them and work with them until they are ready.
Alexis Panaro:Let's talk about uh medical bills and student loan forgiveness. So, um, where are we with with all of those? I know at some point um they implemented you know a medical collection, I think under 500 would fall off of the report, over 500 would stay on the report, student loan forgiveness. So, can you give us an update on you know where we are with those two items?
Mike Olden:Sure. And you know, the previous administration, in the last six months of the previous administration, there were uh very, very strong efforts to uh have uh student loan forgiveness and and uh completely eliminate any any medical debt on credit reports. That that didn't make it through before the end of the administration. So uh on on medical debt, uh what's been in place for for some time now uh is any medical collection, paid or unpaid under $500, is not eligible for being reported on a credit report. Uh and from my experience, the majority of those were under $100. So, you know, can you imagine a you know missing a radiology bill for $26 and it drops your score by 50, 60, 70 points? Uh that's boy, that's uh that's pretty tough to take if you're if you're a borrower. Uh and uh all medical bills that are over $500 and are sent to a collection agency are not allowed to be reported for a minimum of 12 months. And that gives the patient time to work things out with the provider and the insurer. And if any of you are like me, you have experienced uh gaps in communication between the patient, the provider, and the insurer, where you have the documentation showing that was paid, but it falls through the cracks somehow. So those two pieces are in place. Any collection, medical collection under 500, paid or unpaid, not eligible for reporting. Any medical bill over 500 that is sent to collection must wait 12 months before it can be reported. Student loan debt. Uh, you know, the the previous administration again was pushing to uh forgive a lot of those. Uh that didn't happen. Uh, and the last statistics I saw from April were about 30% of student borrowers were 90 days or more past due. And uh so you know that's still an issue. I think uh uh consumers that have student student loan debt should talk to the servicer who holds that loan and see if there's any any workouts on that, maybe deferments similar to what we had during the pandemic. It's it'll probably come down to case by case. Uh and I have not seen anything from the current administration to pick up those initiatives uh right now.
Alexis Panaro:Some great insights from Mike Olden of American Reporting Company. That brings us to the end of this Mortgage Connects episode. For a recap of this episode and quick access to related content, including the full webinar recording, visit mortgagesconnect.com. There, you can subscribe for email alerts so you'll be among the first to know about new episodes or other resources. Thanks for tuning in.