Politics & MoneyMortgage

CrossCountry Mortgage buys First Choice Loan Services, including Costco’s mortgage program

One of the first bank-to-nonbank integrations since Economic Growth, Regulatory Relief, and Consumer Protection Act passed

Did you know that you could get your mortgage through Costco? The big box retail giant may be better known for allowing people to buy 128 rolls of toilet paper in one fell swoop (a virtual necessity at this point), but the company also offers mortgages to its members.

Costco isn’t the lender though. Rather, the program connects Costco members with a select list of lenders and offers members a discount on the lending fees. The lenders in Costco’s program include Freedom Mortgage and Mutual of Omaha Mortgage.

Up until recently, the program was run by First Choice Loan Services, a New Jersey-based mortgage company with offices in 15 states, which was also one of the lenders Costco members could use.

But that’s not the case anymore.

Now, Costco’s mortgage program is being run by CrossCountry Mortgage, which recently acquired First Choice Loan Services and therefore Costco’s mortgage program.

CrossCountry, which has approximately 3,000 employees and licenses in all 50 states, now both runs Costco’s mortgage program and is listed among the Costco-approved lenders.

“The addition of this group is a terrific fit for us,” CrossCountry Mortgage CEO Ron Leonhardt said. “We are pleased that they chose to join us. It enhances both our strategic growth in several regions as well as our consumer-direct component. Our team committed to, and achieved, a smooth transition for the loan originators and we are seeing immediate success with this transaction.”

According to the team at First Choice, the company explored selling to other companies, but CrossCountry “stood out” above the rest.

“Ron and his leadership team made this process transparent and clear,” First Choice Executive Vice President and Chief Operating Officer Norman Koenigsberg said. “We laid out a roadmap for success in our first meeting, and CCM never deviated from it. To my knowledge this is one of the first successful bank-to-non-bank integrations following the passage of the Economic Growth, Regulatory Relief, and Consumer Protection Act. The transition has been seamless. They really are crazy good!”

According to First Choice Executive Vice President and Chief Financial Officer Ralph Picarillo, CrossCountry offers financial advantages that other companies did not.

“As a mortgage industry financial executive, I was immediately struck by the outstanding balance sheet, but I quickly realized that the leadership was even more remarkable than the financials,” Picarillo said. “CCM’s reputation for integrity is well-deserved on all levels.”

In a release, the companies said that the Costco program was an important part of the deal.

“There was an extensive review process on both sides to ensure that that program would go forward with the high level of service required to provide the outstanding experience Costco members expect,” First Choice Executive Vice President Bill Schneider said. “CCM was the company that more than met the requirements.”

Financial terms of the deal were not disclosed.

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