People now trust Walmart more than banks

July 30, 2016

By GlobalPost WriterMandi Woodruff, Business Insider

Police man the front of a Walmart store amid heightened Black Friday security in Paramount, California on November 23, 2012 as shoppers arrive and Walmart employees and their supoorters protested nearby.
FREDERIC J. BROWN

The relationship between consumers and big banks has been far from functional these last few years, but you know things have gotten rough when people would rather put their mortgage application in the hands of a Walmart cashier.

One in three consumers said as much in a new survey by the Carlisle & Gallagher Consulting Group, and nearly half said they'd consider taking out a mortgage from PayPal.

For now, both ideas are little more than pipe dreams. Neither company has revealed plans to offer home loan services, though mega-retailer Costco rolled out a new mortgage service arm earlier this year.

The survey included 618 respondents who answered questions on their views toward home ownership, how recent changes in the mortgage industry impacted their application experience, and what they considered most during the mortgage application process.

GlobalPost infographic: Walmart World

The vast majority (80 percent) said they would turn to non-bank lenders if given the chance, citing a host of frustrations.

High interest rates, high payments, and taxes and escrow were the top three most frustrating issues, according to the report. More than half said banks were too slow to approve loans, making it "one of the most painful aspects of the mortgage process."

On top of those shortcomings, banks were hard to communicate with, had issues keeping track of mortgage application status, and offered "untrustworthy advice."

These gripes, of course, are hardly anything new. In the wake of the housing crisis, mortgage servicers and banks were dragged through the mud for predatory lending and other shady practices that many consumer activists blamed for the foreclosure crisis.

“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 asset segmentation.”