Can anyone shed any insight on this:

Here's the dealio - I have a first and second mortgage with two different mortgage companies, for simplicity sake, lets say my first is with ABC Mortgage and my second is with XYZ Mortgage... The first being the primary holder (ABC) and the second is just a small loan that was taken out for home improvements (XYZ)...

So, I am talking with XYZ company about rolling the first and second into one mortgage and doing a refinance of both balances as one, thus eliminating the second mortgage...

Well, a completely different mortage company called (who I had my first mortgage with years ago, but currently do not have anything with right now) and says "Out of concern, the credit bureaus informed them that my credit was pulled and they wanted to make sure I was aware of that and had authorized that." When really, it is just a ploy to get into the game and compete with XYZ for the note... My question is, how the heck does this 3rd company even know that I had my credit pulled by XYZ and is that even legal? How do they have the right to monitor my credit report for any activity, especially if I am speaking with one of their competitors? Which prompted their call to me. The 3rd company isn't concerned I had my credit pulled from XYZ company, they just want to put a bid in. I hope this makes sense...Any insight is appreciated...