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American Homeowners Association



Is Your Personal Mortgage Info Being Leaked?

Nothing's more personal than applying for a mortgage loan. It's a matter of baring your heart, soul and personal finances in excruciating detail, the financial equivalent of a DNA test. But what happens to that information after the loan application process is done? Does someone take the information and sell it to the highest bidding marketing firm?

It's so mind numbing that we soon forget what we wrote down, but all that information is a potential gold mine to direct marketing firms. Think about it, you gave your personal or business income, tax returns, credit cards, bank information, assets, employment history... just about anything anyone needs to sell you something, or do a marketing survey.

So is that information protected? No, it's not, shockingly enough, not by federal law. That's the source of congressional debate right now over the parallel issue of bank account privacy. But no federal statutes prevent mortgage brokers or independent mortgage companies from stockpiling loan application data and selling it. And there is a lot of information out there, too. 24.7 million home loans or applications were reported to the Federal Deposit Insurance Corporation for 1998. That's a tremendous stockpile of consumer data for private companies that might want it.

At the same time, it's the sheer volume of information that makes it so unwieldy to the small or medium sized mortgage company or lender. Most probably don't have the wherewithal or data crunching ability to sort, manage and package the data for outside consumption. Unless, of course, the data is already digitized for easy consumption, as is happening now via electronic applications or the Internet. And it's probably only a matter of time until businesses recognize and exploit the growth potential in this wealth of information. Many companies, such as Countrywide Home Loans and Norwest Mortgage Corp, already use the information to market their own financial products. But they claim to only use the information in-house.

What's a consumer to do? First, ask your mortgage lender about their privacy policy. Can your information be shared? Be especially careful before providing your personal financial data over the Internet. Is the site really secure? Beyond that, what does the owner of the web site guarantee, in terms of privacy? It may take years before Congress passes legislation protecting consumers from having their personal mortgage data sold to outside firms. In the meantime, it's buyer beware. Sources used to create this article include writer Kenneth Harney and Contra Costa Newspapers.

By Cliff McCreedy

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