Popular consumer products dealmaker, Costco, has become a matchmaker, too. An article posted at CNN Money reported that the retail giant has started to offer mortgages through approved lenders and heavily marketing the program to its 68 million members. The nation’s number three retailer and the world’s largest membership warehouse chain, Costco has thrived by defying convention, so the sale of mortgages is not entirely surprising.

What may be surprising is how little the retailer has to do with the actual loan process. Costco will function as the bridge between interested members and the lenders who have been approved by Costco to participate. And the roster of participating lenders is continuing to grow. We could see this trend develop quickly throughout the intensely competitive retail industry. Costco is already offering student loan options and recreational vehicle loan options and they’re looking forward to offering auto loan options to their members in the near future.  

It may be too soon to understand how this trend could positively or negatively affect the real estate and lending industries. But lenders and mortgage service employees can expect a wide variety of borrowers to apply for a loan through Costco. Also, the majority of borrowers who utilize this service will be refinancing their current home rather than purchasing a new home. Certain biases that some borrowers face when interacting with lenders may be absent as the lender will not now the identity of the applicant until the applicant has made their final lending choice. Options will also be available to those members that have bad or little credit.

It’s been noted in a recent post that Costco may face legal battles involving “laws that regulate licensing and compensation for mortgage brokers and originators.” In the end, any legal woes will probably be a bump in the road and not a roadblock. It’s been speculated that WalMart is looking to host a similar program and possibly Safeway, too. Consumer trust in “big banking” continues to wane as homeowners and borrowers pine for alternatives. Partnering with smaller lenders through mortgage programs at retailers such as Costco may be the ticket to a healthier and more optimistic recovery.