There are many ways that a borrower and a mortgage company can come together. Perhaps you saw an advertisement and called them. Alternatively, perhaps they called you. Many wonder, “How did they get my name?”

If you are currently a homeowner, some of your information is public record. Many mortgage companies have access to your local county courthouse, where they are able to ascertain your name, address, current mortgage company, how much you paid for your home, and many times even your phone number. Using this information, they determine if you are a likely candidate for their programs, and give you a call.

Tip: When receiving an unsolicited call from a mortgage company, many people ignore the messages. That will prompt the mortgage company to continue calling. You can banish your name permanently from their call lists simply by telling the caller to remove your name from their list. By law, they cannot call you again. If they do, you can contact the FTC, and in some cases earn hundreds of dollars!

No matter how you come across the mortgage company, you decide that you are willing to go forward with the mortgage process. You pick up the phone, and you inquire about one. Lenders MUST follow certain guidelines when handling your call. They are NOT allowed to prejudge you. For example, if you call them and volunteer information such as “I filed bankruptcy last year,” they cannot tell you that you will not qualify for a mortgage. How can they? They have not even seen your credit report! By law, they must encourage you to take an application IF YOU DESIRE. By telling you that you will not qualify, they, in essence, have made a credit decision without looking at your credit report. They then MUST send you a form within 30 days detailing the decision they made. This process of making a credit decision without an application is illegal.

However, they CAN legally tell you what their guidelines are. For example, they can say, “With regard to bankruptcy, our general guideline is that we can loan up to 70% of your home’s value. Would you still like to take an application?” What the lender is doing is presenting you with their guideline for a certain situation. It places the burden back on the borrower to decide whether to make an application. No credit decision took place on the part of the lender. There are several nuances to this law, but it is pointless to discuss. Suffice it to say that if you suspect that a lender discouraged you from taking an application, or if they made a credit decision without pulling credit, they have broken the law. This may be a sign that this is the sort of company you do not want to send all of your personal information to.