Lender Processing Services, one of the U.S.’ largest mortgage processing companies, announced it would be opening a 40,000 square-foot office space in India for LendingSpace, a Hyderbad-based technology company it purchased in 2012.
LendingSpace is a loan origination system that helps correspondent lenders streamline origination in the U.S., but the technology is supported by its employees in India.
What is interesting is the timing of LPS’ choice to grow its offshore workforce, as regulations and compliance surrounding origination tighten.
“Companies’ management must be knowledgeable about and involved in the day-to-day operations of the organization,” in order to meet today’s demands of governance and control, said Becky Walzak, consultant for the mortgage industry and CEO of LookingGlass Group, LLC.
“New requirements focus on operational issues such as overall quality of the product being produced, with a special emphasis on processes that have the potential to financially harm the consumer,” she added.
Lastly, when asked what the biggest compliance issue mortgage professionals would have to face, she said, “will their technology platform be able to support the changes required and will the company have enough governance and control?”
According to a spokesperson from LPS, “the people in [Hyderbad] are LPS employees and adhere to the same infrastructure and security policies, procedures and standards that are applicable throughout the rest of the company.”
Others in the industry agree that offshoring products or services offered in the U.S. shouldn’t be a problem at all. Phil Huff, CEO of Platinum Data Solutions, a third-party solutions provider for the mortgage industry, says the industry is “well-suited for offshoring.”
“[Offshored] processing makes a lot of sense considering the ebb and flow of the market,” he said. “Rudimentary tasks can be shipped overseas," Huff said, which includes making sure all mortgage applications are filled out fully and all the boxes are checked. Huff said that processing tasks which don't need subject matter experts can be done overseas.
"But compliance still has to be here," he said.