Mortgage Companies Turn to Offshoring

The financial service industry has an advocate for offshoring in the form of mortgage companies. For the last 15 years, mortgage companies have led the way in offshoring work, showing that sending work to other countries can boost a profit margin. The practice now has an established place in the mortgage field, and may be a growing part of the business, as the field gets more and more competitive.

Reports show that in 2005, more than half of the $44 billion in direct costs for mortgage companies was labor expense. Offshoring could possibly cut that number in half, though it would result in a reduction of jobs in the US. While the numbers make sense from a corporate standpoint, some mortgage professionals are wondering if offshoring is such a good idea. Though the positions that are filled in other countries are usually computer-based, some within the field feel that offshoring reduces the personalization of a mortgage, as well as reducing jobs available to qualified workers in the US.