1.
1 in 3 Would Consider a Walmart Mortgage
80% of U.S. Consumers Would Consider a Non-bank Mortgage
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2.
Introduction
Key Questions
1. What is the current view toward
home ownership?
2. How have recent changes in the
mortgage industry impacted the
application experience?
 Homeowner confidence is high –
half of U.S. homeowners expect
their home to grow and deliver
significant value
3. What factors are most important in
the mortgage process?
 One-third of consumers would
consider a mortgage from
Walmart
 There are distinct profiles of
4. Would customers be willing to
consider a non-bank for their next
mortgage?
mortgage buyers
 Primary banks are missing 31%
of share with captive customers
2
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5. What do primary banks need to do
to add market share?
© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

3.
Survey Snapshot
Household Income
Age Distribution
Overall mix of respondents reflects a
higher income base
METHODOLOGY
Even distribution of respondents across
age segments
13%
38%
All respondents live in
the U.S.
•
The survey was
conducted online
18-34
Less than
$49,999
35-50
33%
$50,000 to
$99,999
46%
618 survey responses
•
3%
•
32%
Over 50
• Participants were
$100,000 to
$249,999
recruited from an online
research panel
$250,000 or
more
•
Participants were
required to be over 18
years of age
•
Last Applied for Mortgage
There were no specific
requirements to be on
the panel
•
35%
The study targeted 50%
of respondents to have
household income over
$100K and no more than
25% below $50K
52% of respondents have purchased a new house or refinanced their home since 2010
Before 2010
24%
48%
2010-2011
2012
3
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28%
© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

4.
Home Ownership Confidence is High
Expected Financial Return on Home
44%
4%
6%
Don’t
know
46%
Decline
over time
Flat growth and
maintain value
Grow significantly
over time
Q12: Which of the following best describes your expected financial return on your home?
 46% of respondents expect their home values to grow significantly over time
 Only 4% expect housing values to decline over time.
 Only 40% of respondents over 50 expect home values to grow significantly
 The 35-50 age category are the most optimistic
4
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5.
Home Ownership is Still an Important Investment
View of Home Ownership
53%
43%
4%
Decline
over time
A key
component, but not
most important
investment
Most important investment
This trend is most significant for
family incomes below $100K
Q12B: Which of the following best describes your view of home ownership?
TAKE AWAY
Homeowner appeal remains strong
5
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6.
The Pipeline for Home Buying is Shifting Towards Home Purchases
 Mortgage originations are
($B)
forecasted to contract in 2013
2011
2012
2013
2011-2013 CAGR
– Refinance volume will
decrease from 68% of total
originations to just 40%
Total Originations
1262
1466
1043
-9.1%
Purchase
404
406
631
25.0%
– Purchase volume is
forecasted to increase
Refinance
858
1060
412
-30.7%
Refinance % Share
68%
72%
40%
– Overall, total originations is
forecasted to decrease
Source: MBA Mortgage Finance, September 18, 2012
Timing for Families Who Plan to Buy A Home
 According to CG’s survey,
in the next ten years:
– 57% of homeowners
between the ages of
18 and 34 plan to buy
a new home
– Only 25% of
homeowners over 50
plan to purchase a
new home
37%
Expect to buy a
Expect to buy a
new home in the
new home in the
next 10 years
next 10 years
Within the next 12
months
16%
1-3 years
More than 3 years
An efficient purchase process will be critical in order to be
competitive, including refocusing key resources back to fulfillment.
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44%
Q11: When do you expect to purchase a new home?
TAKE AWAY
6
40%
© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

7.
Primary Banks Remain in a Strong Position Overall with Their Customers
 Respondents have a strong satisfaction
Satisfaction with Primary Bank
levels with their primary bank
 The majority believe that they are
4%
preferred customers
 25% of respondents look to a specific
High
14%
person at the bank for guidance and
assistance
Moderate
 Technology, security, and location rank at
the top of the list
81%
 Customer service and cost rank lower
Low
Satisfaction with Primary Bank Features
RESPONSE
MEAN
Technology for online banking
4.24
Security of my assets
4.20
Location
4.18
Customer service
4.03
Brand
3.95
Cost
3.88
Products and services
3.82
Q39: What is your degree of satisfaction with you primary bank? (High= 4 or
5, Moderate=3, Low = 1or 2.
TAKE AWAY
Overall satisfaction and priorities suggest that primary banks are
in a strong position to hold a large share of mortgages with their
clients
Q34: For your primary bank, please rate your level of satisfaction
with each of the following (1- no satisfaction at all, 5- highest
satisfaction
7
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© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

8.
Selection Criteria is Complicated
Most Important Factors in the Mortgage Selection & Application Process
Cost
Low cost
84%
Trust in financial institution
46%
Trust in mortgage advisor/salesperson
Trust
Treated as a unique customer
42%
15%
Time-to-close
46%
Understand application process
43%
Simplicity of completing application
Customer
Service
42%
Communication of application status
34%
Simplicity of product
Range of product
Education
19%
15%
11%
#1 Factors in the Mortgage
Application Process
Cost
16%
Q39: Which of the following factors are most important in the mortgage application process?
Choose up to five.
Trust
23%
TAKE AWAY
61%
Despite the importance of cost, there are many factors
that influence the mortgage selection process
8
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© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.
Customer
Service

9.
Customer Service Rises to be a Painful Aspect of the Mortgage Application Process
Most Important Painful Factors in the Mortgage Application Process
Cost
High cost
66%
26%
Untrustworthy advice
Lack of trust in institution
Trust
Not treated as unique customer
21%
11%
Slow execution
56%
Difficult to communicate with
Difficult to communicate with
32%
Unable to track application status
Customer
Service
31%
Difficulting completing application requirements
28%
Complexity of products
27%
Limited product options
No credit counseling
12%
4%
Q41: Which of the following factors are considered to be the most painful aspects in the mortgage application process?
Choose up to five.
77%
respondents believe that
regulatory changes will
have a worse or no impact
on the mortgage process
 Untrustworthy advice rises to the top in the trust segment
 While the speed of execution remains the top service concern, lack of communication rises to be #2 issue
 In terms of top pain area, service increases from 16% as a top area of importance to 35% as the most painful aspect
of the mortgage application process
9
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© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.
of

10.
Primary Banks are Missing their Fair Share of the Mortgage Market
Mortgage Segments for Primary Banks
70%
Unattainable
30%
Current Mortgage
Customers
of
respondents would prefer to
have their mortgage with
one of their main banks
39%
 39% of respondents have a mortgage
with their primary bank
31%
Missed
 This represents significant
opportunities for banks to gain market
share with their current customer base
Opportunity
Q53: Would you prefer to have you mortgage with one of your major banks?
TAKE AWAY
Despite strengths in areas such as checking and credit cards, a large share of
customers look to alternatives for their mortgage needs
10
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© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

11.
Consumers Placing Trust in Non-Banks
80% of Survey Respondents Consider Non-bank Mortgages
20%
80%
Yes
No
Institutions looking to gain market share must target
customer values instead of traditional asset
segmentation.
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mortgage from Walmart
Nearly half (48%) of consumers
TAKE AWAY
11
1 in 3 consumers would consider a
would consider a mortgage from
PayPal
© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

12.
Summary: Banks Must Align to Customer Values to Win Mortgage Market Share
Here are three strategies to gain share in the
new normal:
1. Leverage the Investment in
Regulatory Response to Address the
Voice of the Customer
2. Focus on Cost, Trust and Service as
Defined by Customer Value to Match
Your Target Market
3. Capitalize on Market Share
Opportunities for Primary Banking
Customers
H
12
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© 2012 Carlisle & Gallagher Consulting Group. Proprietary and Confidential.

13.
Study Finds One-third of Consumers Would Consider a Mortgage from Walmart
Tom Mataconis | VP of Consulting
Doug Hautop | Lending Practice Leader
Thomas.Mataconis@cgcginc.com
Doug.Hautop@cgcginc.com
704.936.1610
704.936.1600
Carlisle & Gallagher Consulting Group
212 South Tryon Street, Suite 800, Charlotte, NC 28281
www.carlisleandgallagher.com