Seeking to reduce operational costs in its appraisal division, Bank of America Corp. (BofA) has reportedly opened a unit in India to review home-valuation reports.
Workers in the new facility in Bangalore follow checklists to determine if appraisals are complete, according to a Bloomberg News report, citing anonymous sources.
In addition, BofA has reduced the workforce in its appraisal division, LandSafe. Based in Plano, Texas, the division reportedly has about 2,000 employees.
While certainly not a new trend, banks have been increasingly shipping parts of their mortgage operations overseas as the margins on originating and servicing loans, including reviewing appraisals, have shrunk. This is in part due to stricter regulations that have had the effect of increasing paperwork, which in turn has boosted labor costs.
Government regulators, however, have raised concerns over transparency and accountability when mortgage-related work is sent overseas. Even lenders have indicated there are challenges with regard to oversight of off-shored operations.
Brian T. Moynihan, CEO of BofA, has pledged to reduce the mega bank's operating expenses by $8 billion a year.
BofA has so far spent more than $45 billion to settle disputes tied to defective mortgages and foreclosures as a result of last year's National Mortgage Settlement and other regulatory actions.
Other financial services firms that have been sending select operations overseas include Goldman Sachs and Barclays, according to the Bloomberg News report.