This article on CNN money reveals that Costco is now selling mortgages "in partnership with First Choice Bank, a New Jersey-based community bank, and 10 other lenders." Eventually Costco plans on selling both auto and student loans, expanding its market from retail goods to whatever you need as a consumer. Doing something like this really expands the market Costco has, and the rates that Costco are giving out top that of some banks. Whether or not people will switch to receiving mortgages from non-bank sources is up for debate, but it certainly seems like those who have switched are benefiting.
4 comments:
"Welcome to Costco, I love you."
-Idiocracy
This is really unique. I would never have expected a wholesale club to start offering mortgages. It will be interesting to see if other major competitors such as Sam's club or BJs will start to sell mortgages as well.
I'm curious to see how the Costco company plans to back their mortgage branch. Selling mortgages is completely different from selling consumption goods.
I cannot possibly see this succeeding. I think it'll fail very soon, as no one is going to buy their mortgage from Costco-- people already are hesitant to trust the mortgage market, especially after what happened in the financial crisis with the mortgage backed securities. There's no way they will trust a retail giant with something like mortgages.
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