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Friday, April 5, 2013

Walmart as your home mortgage lender?

According to a financial services study discussed by NBC News, one in three U.S. consumers would consider a mortgage from retailer Wal-Mart and almost half would consider one from online payment provider PayPal.

The results should be especially disconcerting for banks because the two companies do not even offer home financing or second mortgages.

So Why Are Consumers Edging Towards These Miscellaneous Companies?

Well, according to the study, consumers are willing to try alternative lenders as borrowers want to focus more on price, customer service, and trust in their provider when selecting a mortgage; many of the qualities that RANLife Home Loans likes to encompass when servicing their clients.  Many see this as a real threat to large banks and corporations as their could be a real transition in 2013 to non-mortgage companies.

Non-bank mortgage companies such as Quicken Loans and Nationstar Mortgage Holdings Inc have been gaining market share as some large banks such as Bank of America Corp pull back in a business that burned them during the financial crisis.

A Wal-Mart Stores Inc spokeswoman declined to comment on the survey. The retailer provides small business loans at its Sam's Club stores, but doesn't offer mortgages.

A spokesman for PayPal Inc, a subsidiary of online auction site eBay Inc, said it offers credit lines for customer purchases, but hasn't announced any plans to move into the mortgage business.

In the past year, banks have benefited from surging consumer demand to refinance their mortgages at low interest rates.  However, in the coming year, home refinances are forecast to decline, so banks will need to focus more on serving customers taking out loans to purchase homes.

To read the original NBC News article, click here.

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