According to a study conducted with 618 consumers in September by the Carlisle & Gallagher Consulting Group, one in three consumers would consider getting a mortgage loan from Wal-Mart, a discount retailer, and close to half would consider getting one from PayPal, an online payment provider.
While banks are not currently competing with these two companies for mortgages, since these companies do not currently offer mortgage lending services, the market has shown non-bank mortgage companies gaining market share while some banks have lost some market share from the financial crisis.
The study further revealed that 80% of consumers would consider getting a mortgage loan from a non-bank lender, but 70% would still prefer to get a mortgage through one of their main banks, however, only 39% currently do have mortgages through one of their main banks. Perhaps the reasons why consumers might be more motivated to buy a mortgage through Wal-Mart or PayPal stem from the main negative experiences with the mortgage application process (according to the survey): the high cost of getting the loan, the slow execution process, and the poor communication between lender and the applicant. Furthermore, according to Doug Hautop, lending practice lead at the Carlisle & Gallagher Consulting Group, consumers tended to focus on three main qualities they valued in mortgage lenders when choosing a mortgage: price, customer service, and trust.
Would you consider getting a mortgage from Wal-Mart or PayPal?