NEW YORK (S&P Global Ratings) Feb. 7, 2023--Companies using offshore teams to conduct business is not a new concept. U.S. residential mortgage servicers have been using offshore teams for some time now, which can involve the company either hiring third-party vendors and staff, or building its own in-house offshore operations. S&P Global Ratings has observed that the types of functions being offshored can vary widely, from administrative back-office tasks to more complex responsibilities, such as call center functions related to customer service, collections, and loss mitigation. Several servicers combine both approaches.
Our servicer ranking evaluations consider the quantitative and qualitative factors offshoring provides. But we do not take a position as to whether a company should offshore any functions.
Although some residential mortgage servicers have transitioned certain functions back to the U.S. due to performance issues, we believe that many servicers will continue using offshore teams because of cost efficiencies and performance gains. Many servicers have indicated that these benefits outweigh the risks. For more details, see "Offshoring Remains A Viable Option For Residential Mortgage Servicers," published today on RatingsDirect.
This report does not constitute a rating action.
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