You can no longer get a mortgage at Costco

That stands in contrast to Walmart, which just started offering mortgages

Costco might have everything you need for a housewarming party, but as of this week it can’t help you buy the house. Homebuyers will have to look elsewhere to secure a mortgage, as the members-only big box store announced it’s no longer in the business of financing homes.

The retailer recently decided to discontinue its foray into home financing, effective May 1 – meaning customers no longer will be able to pick up a mortgage as they nosh on free food samples and stuff oversized carts with oversized goods.

Since 2020, when Ohio-based retail lender CrossCountry Mortgage acquired First Choice Loan Services – which had an existing partnership with the retail chain – CrossCountry has both run Costco’s mortgage program and has been listed among its Costco-approved lenders.

Founded in 2003 by mortgage broker Ron Leonhardt, CrossCountry originated $52 billion in mortgages in 2021, up 22% year over year, checking in as the 17th biggest lender in the country, according to Inside Mortgage Finance

Alicia Gauer, the senior vice president of corporate communications for CrossCountry, responded to an email requesting comment saying: “We do not comment on partner-led programs. We’d encourage you to reach out to Costco on this request.”

A spokeswoman for Costco responded in an email saying, “Management has no comment at this time,” and asked that the response not be attributed to her by name.

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Each company has listed minimal information on its website. Costco’s announcement says simply: “Members with questions regarding their current mortgage application and loan should contact the lender they have been working with.”

It then lists the lenders it worked with and provides phone numbers for those companies, including CrossCountry. The other lenders Costco partnered with include Box Home Loans,, Mutual of Omaha Mortgage, NASB, NBKC Bank, Real Genius and Strong Home Mortgage.

When First Choice was acquired in 2020, Leonhardt, the CEO of CrossCountry — which has approximately 3,000 employees and licenses in all 50 states — said the acquisition of First Choice and its deal with Costco was a “terrific fit.”

“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,” Leonhardt said at the time.

In a news release also issued at that time, both companies noted 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.”

The news of Costco’s exit may interest another global retailer: Walmart.

The big box store just announced its partnership with Lenders One Cooperative less than two months ago, an arrangement in which Lenders One will lease retail space inside Walmart stores from which it will offer mortgage products and services.

In early March, Lenders One said it would begin selling purchase, refinance and home equity products at its “store-in-store” branch locations. It wasn’t immediately clear how many Walmart stores would feature Lenders One branches.

In a statement, Justin Demola, president at Lenders One, said that the initiative was part of the cooperative’s mission to help members “improve their profitability and better compete against larger, well-funded mortgage lenders.”

But Walmart and Lenders One executives surely will be following the news that the CrossCountry-Costco partnership has been disbanded. Gauer, the spokeswoman from CrossCountry, did not immediately respond to a question about whether there were any obvious challenges faced or hard-won lessons learned that would benefit Walmart in its endeavor.

Costco’s exit from the industry isn’t the first major departure from a mortgage player this year.

Santander Bank this February announced it would stop originating residential mortgages and home equity loans in the United States, citing higher rates, lower volumes, and fiercer competition, as reported by HousingWire at the time.

Santander’s decision – and now Costco’s – regarding mortgage and home equity is another sign the high-flying days of the mortgage industry are behind us. Case in point: The Mortgage Bankers Association has said it expects originations to decline 33% year over year to $2.59 trillion in 2022.

By contrast, although CrossCounty’s collaboration with Costco is ending, the company is by no means shrinking. In late April, CrossCountry was set to acquire LendUS, in what appeared to be the first of what analysts and industry veterans believe will be a wave of mergers and acquisitions in 2022. 

CrossCountry has been acquisitive over the last couple of years, and often the target company will operate under CrossCountry’s umbrella after the acquisition. 

That includes not only Costco in 2020, but bemortgage in 2019.

Gauer did not immediately respond to a question about how the severed Costco partnership plays into its future plans.

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