Countrywide to 'Offshore' 250 Jobs to India
Countrywide Financial Corp.'s chairman said it plans to open a call center in India that will save it about $35,000 per employee per year.
Responding to a question Thursday at a Mortgage Bankers Association luncheon in New York, Angelo Mozilo said the Calabasas, Calif., company would employ about 250 in India by the end of next year.
According to his estimates, the center would save Countrywide $8.8 million a year.
"Because of the proprietary nature of our technology," as well as cost efficiencies, Countrywide uses employees in India to write its own software, Mr. Mozilo said.
Labor costs tend to be much lower in foreign countries, but the mortgage industry has been slower than other financial services sectors to outsource or establish operations internationally, analysts say.
However, a number of lenders have begun to move operations outside the United States or are exploring the possibility of doing so.
The call center in India "will be a very important factor to achieve economies we can pass on to consumers at the lowest possible cost," Mr. Mozilo said.
Charles H. Foster, the chairman and CEO of LandAmerica Financial Group Inc., said a lot of title information work is moving to foreign countries to improve speeds. "If you put in an order for title evidence … and do it during our sleeping hours, you get up the next morning and it's complete."
On another subject, Mr. Mozilo said Countrywide plans to increase its sales force from the current 7,500, to between 30,000 and 40,000 in five years. (During Countrywide's fourth-quarter earnings call Tuesday, he had said it plans to add 2,500 salespeople this year.)
At the luncheon, he said he was not fazed by the end of the refinancing boom, which he said presents an opportunity for the top lenders to grab market share.
"You can go into a fetal position when something like this happens, but that's a mistake," Mr. Mozilo said.
Also at the luncheon, L. Stephen Smith, the president of PMI Mortgage Insurance Co. of Walnut Creek, Calif., said the PMI Group Inc. unit expects home prices to appreciate by 4% to 5% this year.
The chance that home prices will depreciate in the 50 largest metropolitan areas in the next two years is only 17.4%, up slightly from October but still a low risk, he said. "Over all, we believe housing remains stable."
However, without "significant job creation and a decline in unemployment rates," the environment will remain "troubling" for mortgage insurers, Mr. Smith said.