Bank of America Corp has opened a unit in India to handle the work of reviewing appraisal reports as they try to rebuild their share of the U.S. mortgage market at a lower cost. Unskilled reviewers in the new Bangalore office follow checklists to determine if appraisals are complete according to a Bloomberg article.
Workers in the new Bangalore office follow checklists to determine if appraisals are complete, said the people, who requested anonymity because they weren’t authorized to comment. The firm also eliminated jobs of licensed U.S. workers in its LandSafe business, the appraisal division of the Charlotte, North Carolina-based company, which made $78.7 billion in loans last year, the people said. “One of the biggest problems in the mortgage business is all the paperwork involved, and how do you engineer it to reduce the bottlenecks,” said Bert Ely, an independent banking consultant in Alexandria, Virginia. “With offshoring, the potential for problems is always there, but it’s hard to be critical for trying to minimize costs.”
Hard to be critical….really?
Relying more on checklists may increase the odds of defective reports going undetected, said Karen Mann, a Discovery Bay, California-based appraiser who testified for the Financial Crisis Inquiry Commission’s 2011 report. The FCIC examined the causes of the housing bubble and subsequent 2008 credit crunch. “Experienced, licensed appraisers know the shortcuts people take, so those reviewers can be invaluable,” Mann said. “With the checkboxes, they’re looking for things that don’t really have anything to do with values.”
But BOA is saving money, nothing else matters. That money can be used for additional advertising, letting America know just how much they care about the folks that bank with them.
The Feds endorsed the “too big to fail” idea by bailing these banks out and letting them get even larger. HVCC destroyed the appraisal business and just added another layer of mismanagement to the real estate business. With Washington’s help, the banks have grown larger and more powerful, the appraisal industry is falling apart and getting a simple mortgage completed on a sale has become a UFC title fight. So why would BOA caring only about THEIR bottom line be surprising? These lenders care about no one, they don’t need to with Washington in their pockets.
Hank Miller, SRA
Associate Broker & Certified Appraiser
Atlanta Communities Real Estate
678-428-8276 direct
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www.hmtatlanta.com
