As one retailer leaves the mortgage business, another enters.
- After 10 years in the mortgage business, Costco discontinued the service.
- Walmart could fill the void by teaming up to offer mortgages in its stores.
As of May 1, Costco members could no longer rush to the big box store to buy essentials like hamburger buns, batteries and a home loan. Costco has announced that it is getting out of the mortgage business. Here’s what we know.
Sunday May 1
It appears some Costco members were in the middle of the loan process when the retailer abruptly left the business. The company wrote: “Members with questions regarding their current mortgage application and loan should contact the lender they worked with.”
Costco then listed contact information for the eight lenders it was affiliated with, including Lending.com, Mutual of Omaha Mortgage, NASB, Box Home Loans, CrossCountry Mortgage, NBKC Bank, Strong Home Mortgage and Real Genius.
Costco first entered the mortgage business in 2012 when it partnered with New Jersey-based First Choice Loan Services and 10 other lenders to offer a full-service mortgage program.
As fun as it is to imagine someone picking up a pallet of paper towels and a mortgage on the same shopping trip, only brochures were available in the store. The actual loans were processed online. The program took off like gangbusters, which makes the abrupt ending a bit more interesting.
In 2020, Ohio-based CrossCountry Mortgage acquired First Choice Loan Services and began managing Costco’s mortgage program.
Although Costco was never the direct lender, it did play a role in the mortgage process by providing a cap on lender fees and saving money for Costco members connected to the transaction.
Now, as Costco leaves the company, neither Costco nor CrossCountry executives have commented on the change.
Will Walmart fill the void?
Walmart, home of gummy bears and ceiling paint, recently announced that it is also getting into the mortgage business by partnering with Lenders One Cooperative. Lenders One will offer mortgage products from leased retail space in Walmart stores. It is currently unknown how many Walmarts nationwide will include a Lenders One branch.
Even as Walmart enters the fray, the mad rush to take out a mortgage may be on the wane. The Mortgage Bankers Association (MBA) predicts total mortgage volume will fall 33% this year, primarily due to rising interest rates.
Alert: The highest cash back card we’ve seen now has 0% introductory APR through 2023
If you use the wrong credit or debit card, it could cost you dearly. Our expert loves this top pick, which features an introductory APR of 0% until 2023, an insane cashback rate of up to 5%, and all with no annual fee.
In fact, this map is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes.
Read our free review