Costco, the warehouse retailer known for offering merchandise in large amounts and sizes, has also been helping its members out with refinancing mortgage loans.
The big box retailer has been providing a marketing gateway for its members and 10 mortgage lenders from around the country for about a year, according to Jay Smith, director of business and financial services for Costco.
Smith declined to share how many mortgage loans the Issaquah, Wash.-based company has facilitated during that year, but said it was in the thousands and that the loans represented tens of millions of dollars in volume.
Costco has partnered with First Choice Bank of New Jersey for the platform for collecting basic data from the mortgage-seeking Costco members. The data includes amount of the loan sought, the type of property it is, the credit range of the borrower and other sorts of details, but no information like Social Security numbers, Smith said.
First Choice shares the data with other lenders on the platform who then offer the member a mortgage loan and a given rate. The member then chooses which lender to approach for a loan. The member benefits from the arrangement because Costco has established rules for lenders participating on the site. Mortgage fees are capped for Costco executive members at $600 and $750 for Gold Star members and lenders agree to keep their mortgage rates within a set of parameters and to keep their standard of service high.
Smith would not discuss the interest rate parameters but said the company works with First Choice to monitor consumers using the service and surveys members to measure member satisfaction with the lenders which includes both nationwide and regional lenders.
Smith said Costco would be open to working with credit unions as lenders in the program, but said that the retailer felt constrained by the work it took to manage the program at the current size already.