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You are correct. I did a search and the surname "Villalobos" supposedly originates from the Spanish language, meaning "village of wolves" and is common in Spain, Portugal, Latin America, and Italy.
There are many indicators that the name Villalobos may be of jewish origin, emanating from the jewish communities of Spain and Portugal.
Still doesn't have to mean it's 100% jewish surname. They often steal local surnames when they move into new land.
There's more to it in the link.
When the Romans conquered the jewish nation in 70 CE, much of the jewish population was sent into exile throughout the Roman Empire. Many were sent to the Iberian Peninsula. The approximately 750,000 jews living in Spain in the year 1492 were banished from the country by royal decree of Ferdinand and Isabella. The jews of Portugal, were banished several years later. Reprieve from the banishment decrees was promised to those jews who converted to Catholicism. Though some converted by choice, most of these New-Christian converts were called CONVERSOS or MARRANOS (a derogatory term for converts meaning pigs in Spanish), ANUSIM (meaning "coerced ones" in Hebrew) and CRYPTO-JEWS, as they secretly continued to practice the tenets of the jewish faith.
No matter how deep they hide or how many plastic operations they get, their behavior will always be there to give them away.
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