Banks Outsource Mortgage, Foreclosure Work to India

Image: Banks Outsource Mortgage, Foreclosure Work to India Employees work on computers at an outsourcing center in Simayal, India.

Tuesday, 28 May 2013 09:54 AM

By Courtney Coren

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink
U.S. banks are outsourcing mortgage and foreclosure work to India to keep costs down and keep up with growing regulatory demands created since the financial crisis of 2008.

The banks are using technology firms on the sub-continent to supplement some of the needed work rather than hire more people in the United States, The Wall Street Journal reports.

But regulators worry that there is poor supervision by banks of third-party vendors. And consumer advocates fear that in the long run, it will be harder for banks to be sure that the work is done properly.

"The lack of oversight so far away may be too much for these banks to handle, considering how badly they've handled overseeing their own staff," said Ira Rheingold, executive director of the National Association of Consumer Advocates.

After 2008, the U.S. government demanded changes to every aspect of the mortgage and foreclosure process. Banks are outsourcing to meet the changing rules and demands.

The Indian companies say that their role won't be giving final approval for mortgages or foreclosures.They will help the banks by preparing the necessary documents that the banks will have to sign off on.

"We never judge the cases," said Abid Ali Neemuchwala, vice president of Mumbai-based Tata Consultancy. "What we do is make it easy for the banks to make that final decision by putting together all the information and letting them know their checklist is complete."

According to The Wall Street Journal, this move increased revenues for Indian outsourcing firms to $316 million in mortgage work for this year — double the revenue from similar work in 2009.

While some argue that outsourcing may help banks maintain their bottom line, there is concern that customer service will suffer.

"If their solution is to minimize costs, that's the solution they've found," Rheingold said. "If the solution is better customer service, they have clearly not found it. The solution is not overseas; it's within their own practices."



© 2014 Newsmax. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Retype Email:
Country
Zip Code:
 
Hot Topics
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
You May Also Like

Wash. Post: Review Finds FBI Crime Lab Unit Rife With Flawed Forensics

Tuesday, 29 Jul 2014 23:04 PM

Nearly every criminal case the FBI and Justice Department has so far reviewed since launching the largest-ever probe of  . . .

Marco Rubio: Letting Illegals Apply for Jobs Would Be a 'Lure'

Tuesday, 29 Jul 2014 22:55 PM

President Barack Obama's possible move to allow millions of illegal immigrants to apply for work in the United States wo . . .

Mike Rogers: White House 'Not Connected to Reality' on Russia

Tuesday, 29 Jul 2014 22:04 PM

The White House is not acting seriously enough on Russia's breaking of the 1987 Intermediate-Range Nuclear Forces Treaty . . .

Most Commented

Newsmax, Moneynews, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, NewsmaxWorld, NewsmaxHealth, are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved