Inside the Walmart, Lenders One mortgage deal

Retail giant is leasing retail store-within-a-store spaces to multiple members of Lenders One Cooperative

Walmart photo credit: wolterke –

Lenders One Cooperative and Walmart want mortgages in your shopping cart. 

On Monday, the cooperative announced that it has struck a deal to lease space in Walmart stores to sell purchase mortgages, refinances, and home equity loans. Lenders One did not disclose the financial terms of the contract.

This is not the first deal amongst mortgage lenders and big-box retailers: Costco has a partnership with Ohio-based CrossCountry Mortgage, which in 2020 acquired First Choice Loan Services, inheriting Costco’s mortgage program.

But the Lenders One deal is structured quite differently, so let’s break it down.

The negotiations between Lenders One and Walmart started more than a year ago. During the process, it became clear that the retailer was resistant to leasing its space for only one mortgage lender, said Justin Demola, president of Lenders One Cooperative.

“We don’t believe they would give it to a single mortgage company, based upon what discussions we’ve had over the past 18 months or so,” he told HousingWire. 

Leasing retail store-within-a-store spaces to a range of different mortgage lenders is a way of diversifying risk – should one lender faces financial difficulties, the others can keep doing business. The cooperative’s value proposition is it can bring more financial stability in dealing with different mortgage lenders at the same time, Demola said. 

Lenders One will be responsible financially for the leases. However, the cooperative will sublease the space to its members interested in offering their mortgage products to Walmart customers. 

“They came to us because of our size, scope, and structure,” Demola said.

Founded in 2000, Lenders One Cooperative has a network of more than 250 independent mortgage bankers, banks, credit unions, correspondent lenders, and suppliers of mortgage products and services. The platform is managed by a subsidiary of Altisource Portfolio Solutions, a service provider and marketplace for the real estate and mortgage industries.

The cooperative members cover the entire lending spectrum, originating between $50 million and $25 billion per year. Collectively, their origination volume reached around $780 billion in 2020. Rocket Mortgage, the largest mortgage lender in America, originated about $320 billion in 2020.

Walmart branches will have a Lenders One brand identification but refer to the mortgage lender as the provider of products and services. Demola said whichever co-op member chooses a location first and shows it can begin doing business will operate the branch.

“It is like our children – all members are equal,” he said.

Why sell mortgages in Walmart stores? 

Most of Lenders One’s members have a branch-centric model and are purchase-oriented, a good thing considering the current mortgage environment.

Owing to a rapid increase in mortgage rates, the Mortgage Bankers Association believes 2022 and 2023 will predominantly be strong purchase years for the mortgage industry. Of the $2.60 trillion forecast to be originated this year, 67% is expected to be purchase. In 2023, 73% of mortgages in America are expected to be for new home purchases, according to the MBA.  

The cooperative’s aim is to make members more profitable, reduce costs, and increase efficiencies to compete with the larger, well-funded mortgage originators in the country. 

“One of the things that our members have asked for is helping them get better execution on the sale of their loans,” said Demola. “But for the first time, we’re helping our members fill the top of their sales funnel with potential borrowers to purchase or refinance a home.” 

In this first phase, Lenders One inked deals for three Walmart locations in Florida and New Jersey. The target is to reach 20 Walmart stores by the end of 2022, Demola said.

The lenders will start offering purchases, refinances, and home equity but expect a fully diversified product set for Walmart customers. 

By setting up stores within Walmarts, Lenders One members would be putting their products in front of a diverse customer base. That could be helpful in avoiding fair lending claims through state Community Reinvestment Act (CRA) laws, Demola said. “We feel Walmart will give our members an advantage when it comes to answering questions from regulators to put themselves in markets that they may not normally be in for fair lending.”

Demola said that the Walmart deal is just the start. Partnering other retail companies is not off the table. “This is a very large, detailed project. It’s not necessarily easy. We are in a pilot phase. So, we want to see proof of concept. If we succeed here, I believe that we can duplicate it in other retailers.” 

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