One in three consumers say they’d consider getting a mortgage from discount retailer Wal-Mart if they offered them, according to a study of 618 U.S. consumers conducted by Carlisle & Gallagher Consulting Group. The company provides consulting services to some of the top U.S. mortgage originators.
Nearly half surveyed said they’d also consider a mortgage from PayPal, an online payment provider. Neither company offers mortgages.
The study is an indication that consumers are willing to try alternative lenders, says Doug Hautop, lending practice lead at Carlisle & Gallagher Consulting Group.
Should banks feel threatened? Non-bank mortgage companies, such as Quicken Loans and Nationstar Mortgage Holdings Inc., have been gaining marketshare while some banks have tighten up their mortgage lending.
Eighty percent of those surveyed said they’d consider a mortgage from a non-bank. However, 70 percent said they’d prefer to have their mortgage through one of their main banks (only 39 percent said they currently do).
The main complaints from consumers in getting a mortgage: The high cost of getting a loan, slow execution of it, and poor communication with the lender, according to the study.
So are Wal-Mart and PayPal mortgages far-fetched? Neither company is commenting or announcing plans to get into the mortgage business. But retailers in the past have gotten into the mortgage business: In 2011, Costco Wholesale Corp. jumped into mortgage lending through select lenders.
Source: “33% Say They Would Buy a Mortgage From Wal-Mart,” Reuters (Dec. 3, 2012)