Bank of America, after cutting nearly 16,000 jobs last year, has reportedly begun exporting property reviews to India. Operating out of Bangalore, workers will utilize a checklist of 17 criteria in order to determine whether or not an appraisal has been completed. One of the criticisms of the checklist-system BofA utilizes is that it could result in inaccurate reports going unnoticed. “Experienced, licensed appraisers know the shortcuts people take, so those reviewers can be invaluable,” Karen Mann testified before the Financial Crisis Inquiry Commission. Mann is a a Sacramento, Calif.-based appraiser with 30-plus years of experience. “With the checkboxes, they’re looking for things that don’t really have anything to do with values.”
Layoffs were made at Plano, Texas-based LandSafe, a wholly-owned subsidiary of Bank of America, where, back in February, BofA laid off around five percent of LandSafe’s staff due to falling overdue loans. Those close to the layoffs indicate that licensed reviewers who were making over $100, 000 per year were let go, as well. “One of the biggest problems in the mortgage business is all the paperwork involved, and how do you engineer it to reduce the bottlenecks,” Bert Ely, an independent banking consultant told Bloomberg. “With offshoring, the potential for problems is always there, but it’s hard to be critical for trying to minimize costs.”
BofA was once the top mortgage lender in the country, until it slipped down the line last year. CEO Brian Moynihan has been dedicated to cutting costs every way possible, with plans to save around eight billion dollars this year alone. Some have indicated that the shift from property reviews being performed in the states to India is due to a decreased demand for reviews in certain areas.
“The overall consideration isn’t necessarily cost, although cost can be an element,” said Terry Francisco, senior VP of BofA to Bloomberg. “What we’re looking for is if there are patterns in certain areas where it looks like the reviews aren’t necessarily needed anymore.”
There were reports out of LandSafe’s offices that workers were complaining about a lessened-frequency of reviews, as well as the impact on their salaries and job security. It would appear those concerns were well-founded, as India will be benefitting from a lessened-demand for property reviews. Bank of America’s dealings with India are based out of Mumbai, with satellite offices in New Delhi, Kolkata, Chennai and now, Bangalore.