India Not in All Plans

Outsourcing call centers and customer service jobs to India is becoming a hot topic - not just for politicians but for mortgage bankers.

Recently, the nation's two largest residential servicers - Wells Fargo Home Mortgage and Washington Mutual - said that outsourcing call centers to India is not for them.

Together, the two mortgage bankers service almost 20% of all residential loans in the U.S., or $1.37 trillion in mortgages.

Both firms were asked by Mortgage Servicing News whether they had any plans to open mortgage-related call centers overseas - in India or elsewhere.

Both said "no." Wells' mortgage headquarters is in Des Moines. WaMu is based in Seattle.

In February, the nation's third largest residential servicer, Countrywide Home Loans, Calabasas, Calif., said it is creating new call center jobs in Mumbai, India, the city formerly known as Bombay. (Countrywide is ranked third but it may move past Wells in the rankings when first-quarter figures are released.)

The February announcement came a few months after Countrywide chief executive Angelo Mozilo said he would not move call center operations overseas. But earlier this year, Countrywide had a change of heart with Mr. Mozilo saying, "The cost savings in India are just too compelling."

The Countrywide chief estimated that benefit costs in California are $3 an hour per worker, excluding salary. "In India the cost is zero," he said.

Commercial banks have been relocating call center jobs to China, India and Ireland for several years now, but mortgage bankers are relatively new to the game.

Some industry officials believe this could be the wave of the future because labor and office costs are much cheaper overseas.

In early March, E-Loan, Pleasanton, Calif., which funds mortgages but does not service, began offering its customers the option of using India-based loan processors to complete the paper work on their home equity loans.

E-Loan said if a home equity customer uses India-based processors, the loan will close two days faster than if the entire transaction is done domestically.

Besides Countrywide, at least a half-dozen mortgage firms are outsourcing either call centers or software writing tasks to India, China and elsewhere.

Few in the mortgage industry have questioned the strategy, believing that it makes U.S.-based mortgage firms more profitable and productive.

But Stanislaw Bak of HomeSteps Asset Services, a Freddie Mac-owned company, said, "While I understand that unemployment in places like India is high, many employers are too concerned at focusing on the bottom line that they fail to understand that Americans need to be employed, too."

He added that the U.S. has been "exporting jobs overseas too much.

Where will jobs come from for Americans in the future if our employers keep shipping them overseas?"

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