File this under confusing.
A new “online study” from Carlisle & Gallagher Consulting Group released today revealed some interesting consumer sentiment regarding mortgages.
The point of the survey was to determine consumers’ views about the home mortgage application process, and if they’d consider alternatives to the traditional bank or lender route.
The results were somewhat strange.
Of the 618 U.S. consumers surveyed, 80% said they would consider taking out a mortgage from a “non-bank,” which isn’t the surprising part.
After all, these days the big banks are seeing increasing pressure from tech-happy startups and the like, many of which don’t charge fees, or at least make banking easier and related activities less painful.
A PayPal Mortgage?
But what was particularly interesting was that 48% of consumers said they would consider a mortgage from PayPal.
Last time I checked, PayPal was simply a company that allowed individuals to transfer money to friends and family or to pay for online purchases.
Businesses can also use PayPal for their merchant needs as an alternative to standard credit card processing hardware/software.
So where does the mortgage from PayPal come in? I’m not sure, but I guess the results suggest people like the company’s service, and perhaps ease of use, which would leave them open to a PayPal mortgage.
For the record, the biggest consumer gripes regarding mortgages included slow execution during the mortgage process, difficulty communicating with lenders, inability to track said mortgages, and untrustworthy advice.
How PayPal would tackle those issues is beyond me – no matter who’s doing your mortgage, it’s going to take a while these days thanks to the crazy demand and limited supply of mortgage originators.
Fewer Interested in a Walmart Mortgage
Then there’s mega-retailer Walmart, who was also included in the survey.
When asked the same question, only one in three consumers seemed enthused by the idea of picking up a mortgage at Walmart along with their milk, eggs, and big screen TV.
Still, that 33% or so was enough to get the media buzzing about a possible Walmart mortgage in the near future.
Even before this survey, there were plenty of rumors and rumblings of a Walmart mortgage, seeing that they already do just about everything else.
There’s already the Walmart MoneyCenter, which provides pretty much every financial tool you can think of, including bill pay, check cashing, money orders, credit cards, and so on.
Walmart even gives customers the option to purchase items online and pay with cash at a local store.
And I think that last service explains why Walmart won’t provide mortgages to its customers.
Many people that shop at Walmart don’t use credit, and instead rely on all types of other forms of payment such as the always-popular cash option, debit cards, and prepaid cards.
Are these the same consumers actively searching for mortgages, or are they perhaps more debt-averse?
If so, they surely wouldn’t want a mortgage, and would more likely choose to rent.
But Walmart could certainly still enter the game, or at the very least, partner with existing lenders and take a cut of the business, similar to what Costco has done.
The question is whether they’d want to sully their reputation in the process. It’s a tricky business to get in, as newcomers like Discover are probably learning rather quickly.
At the same time, they probably have enough influence to get more shoppers to take out mortgages and ultimately buy homes, which could increase sales of household items at Walmart.
But neither of these companies offer mortgages…