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Take The Mozilo Pledge: Don't Send Your Back Office Abroad

A little more than a year ago, in a column, I suggested that mortgage-related firms that send their back offices overseas were committing "economic treason" against the U.S. In particular, I singled out the financial services arm of a conglomerate best known for their light bulbs, jet engines and the hit television sitcom "Friends."

Not only did the conglomerate's mortgage PR staff blow a gasket when the original column appeared, but the letters/e-mails I received were split 60/40 on the issue. Sixty percent (more or less) said: grow up, and get with the program - outsourcing office jobs overseas makes good economic sense and relieves U.S. workers of the more mundane tasks of paper pushing and telemarketing.

The minority agreed with me - that by sending jobs overseas they were adding to the unemployment woes of Americans and reducing, potentially, the number of consumers who might be able to afford a home.

One critic even accused me of being "protectionist" and belonging to the Democratic party.

Over the past year, I've spent a good deal of time thinking about the issue and I can't say my opinion has changed a whole lot, except for maybe on the issue of using overseas software engineers (think China, India and even "communist" Vietnam.) After all, it's hard to feel sorry for software engineers and writers who were making well into the six-figures during the height of the dot-com boom. If you can believe some of the press reports, many laid-off software professionals are now waiting tables.

Not too long ago I asked Countrywide chairman Angelo Mozilo about the issue of sending mortgage call center jobs overseas. His response: "I won't do it."

But first a disclaimer: Countrywide, he said, has few qualms with using overseas software writers, but that's as far as it goes. A five-decade veteran of mortgage banking, Mr. Mozilo is probably in the minority in his beliefs regarding sending jobs overseas, but as far as I'm concerned his rationale is sound.

"I feel it is the responsibility of Countrywide to create jobs in the U.S. - not outside the U.S.," he said. "To buy a home you need a job. It's a conflict for me."

He also voiced concerns about call center operators working overseas who may not have the best command of English and Spanish. If a call center operator in India says something to a customer and the customer doesn't understand, it potentially can cause problems for not just the customer but for the residential servicer.

Keep in mind that a mortgage, in most cases, is the biggest financial obligation a consumer will ever have. It's not a credit card. A mortgage is secured by real estate. A mortgage is backed by a home. If something goes awry with the servicing of a loan, it could turn out to be more than just a blemish on someone's credit record.

So, there you have it. I ask that all mortgage servicers take the "Mozilo Pledge." Don't send your call center jobs overseas. If you need a low-cost place to do business think Jacksonville, Fla., think Des Moines, think South Dakota. How about Rochester, N.Y.? There's plenty of nice homes there that sell for a mere $100,000.

If you're a Republican and you think it's not economic treason to send financial service jobs overseas, then I'll make this appeal: The 2004 presidential election could hinge on the economy and jobs. The more jobs that move overseas and the angrier that Joe and Josephine Six-Pack feel about it, the less likelihood that George W. Bush will get re-elected. It happened to his father, and it could happen to him.

But that's actually a bad reason to do the right thing. Mortgage servicing (like the origination business) is about customer service. Sure, you can save good money over the short haul by using overseas labor. We all know that. But will that short-term gain turn into a negative when you can't control the quality of your business? If a mortgage gets fouled-up by overseas operators, rest assured that when a customer goes to take out another mortgage your firm will be dropped faster than you can say "regime change."

Paul Muolo is executive editor of both Mortgage Servicing News and National Mortgage News. He can be e-mailed at: Paul.MuoloThomsonMedia.com.

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