Bank of America Corp. is looking to roll out a unit in India that will review all the home-valuation reports. The move by the giant is in lined with its efforts to rebuild on its share in the U.S. mortgages at a less cost. Workers in the new Bangalore office have a set of pre-defined tick downs using which they figure out if appraisals are complete or not. The firm has also cut down on jobs at its LandSafe business, which is the appraisal division of the Charlotte.
Bert Ely, an independent banking consultant in Alexandria, Virginia, commented that one of the biggest hurdles in the mortgage business is the huge number of paperwork that is involved. Engineering this and winning over this bottleneck is the major challenge.
Lenders based across the world have taken a vow to increase revenue and cut down on spending so as to make up for slow-moving loan growth and new regulations. Bank of America, which had paid over $45 billion in dispute settlement related to defective mortgages and foreclosures, is considered to be one of the most aggressive cost-cutters with their CEO Brian T. Moynihan looking to save almost $8 billion a year. The firm was ranked down to number four from being the biggest U.S. mortgage lender in 2008.
Other firms like Goldman Sachs Group Inc, the New York-based investment banking group has increased their staff in lower-cost cities. The head count was almost doubled since 2007 to about 22 percent in the places like Bangalore and Salt Lake City. Barclays Plc also is planning to shift 4,000 more jobs overseas and to cut down on the cost locations by 2015. The move will help Barclays save over 250 million pounds ($381 million).
Staff Cut downs
As per Plano, Texas-based firm’s webpage, LandSafe has over 2,000 associates in the U.S. Apart from the appraisals that are linked to new home loans it also undertakes valuations on various Bank of America’s portfolio which related to delinquent loans. In February, the lender also reduced about 5 percent of LandSafe employees, concluding that the resource was no more required.
The overall consideration however, is not necessarily the cost but also to identify the patterns in areas. Identification of these patterns will necessarily do away with the need to review. The U.S.-based reviewers, having minimum of five years of experience as appraisers, will confirm through their individual assessments which should be in line with the industry standards. The checklists in India include about 17 items like if the appraiser signed the report and included photographs of rooms, etc.
Via : Finance Post