Results from a recent on-line study indicate that not all
consumers are wedded to traditional lenders when it comes to their mortgage
needs. Eighty percent of those surveyed,
in fact, said they would consider obtaining a mortgage from a non-bank.
Consulting Group (CG),
a management and technology consulting firm serving the financial services industry
consumers in September to learn about their views toward home ownership, how recent changes in
industry impacted their application
experience, what factors are most
important in the mortgage
and if consumers would be
willing to consider an alternate mortgage provider.
According to the
618 consumers who participated in the study, almost half (48 percent) would
consider obtaining a mortgage from PayPal and one in three said they would
consider a mortgage from Walmart.
Satisfaction with primary banks was a
respectable 81 percent but study participants expressed frustration with some
current mortgage practices and indicted that these could drive them to consider
alternative providers. The most
frequently referenced issues were high interest rates, high payments, and
dealing with taxes and escrow. Slow
execution was another problem mentioned by 56 percent of respondents while 32
percent cited the difficulty of communicating with their lender and 31 percent
said they were unable to track the status of their loan application. Twenty-six percent said they had received
untrustworthy advice from a traditional lender.
"Consumer attitude is driven by three things, price, service and trust," said Doug Hautop, Senior
Manager and Lending Practice lead for CG. "Institutions looking to gain market share must target customer values instead of traditional