Overseas Role Here to Stay.

A lively discussion about the topical issue of off-shoring jobs overseas ensued at a panel session dedicated to the subject at the MBA's Commercial Asset Administration & Technology Conference here, with the participants agreeing that the practice is a reality of doing business in a global economy.

Catherine Rodewald, chief information officer, Prudential Mortgage Capital, noted that they had "struggled with this a lot," considering that she has had calls from unemployed American information technology people who have been asking for jobs and saying that they have lost theirs to outsourcing.

The reality however is that "10 years from now, it will be here. It will be an extension of how we work as the economy becomes global," she said. Michael Merriam, a Standard & Poor's director, noted that in the servicing area services such as property inspection, tax services and appraisals have been outsourced traditionally and people have been comfortable with that because "they are not skills that you expect servicers to have in-house." Richard Carlson, a Fitch Ratings director, said that now "core competencies are being outsourced," functions such as operating statement analysis and borrower requests, for instance. These traditional servicer functions are going outside, which raises the question, according to him, "why are you outsourcing functions that you have traditionally performed and performed well."

Mr. Merriam said that he was skeptical at first about the outsourcing of functions such as operating statement analysis, wondering if it would still be possible for S&P to assess the servicer's skills. But he has realized that as long as the staff at the outsourced end has the expertise, does the analysis according to accepted formats, and the technology is in place, the outsourcing is likely to work.

Barbara Pereira, director, commercial business development, Ocwen Financial, is seeing a trend toward resource sharing. And she is hearing the term "build, operate and transfer" more, which means that instead of using overseas partners, companies are building their own facilities overseas.

For instance, Bank of America used the services of Infosys, a leading Indian software company, for such a purpose. "They're at a point where they [BoA] understand the risk. From the knowledge base perspective, you want to maintain your knowledge base," she said.

While there is always risk involved "whenever you do anything outside your comfort zone," the question here is how to mitigate it. In outsourcing situations, outsourcers should be aware of the country risk associated with different countries they are considering outsourcing to, such as political factors peculiar to various countries such as India, Ireland, China and the Philippines, which have emerged as prime outsourcing locations.