• OfficeTiger underlined their entry into the mortgage BPO space by acquiring Mortgage Ramp, a US-based outsourcing provider servicing the real estate finance industry.
  
• Genpact acquired Moneyline Lending Services, the US-based end-to-end mortgage services provider.
  
• Adventity acquired Texas Mortgage Company, a US-based home mortgage company in an all-cash deal worth $3 million.
  
• WNS acquired Trinity Partners, an Arizona based provider of outsourcing services to financial institutions.

BPO vendors, especially the larger Indian vendors, seem to think that mortgages is where the action is, judging from the acquisition spree. While multi-service providers such as Genpact, OfficeTiger and WNS are driven by the need to broaden their range of services, specialized players such as Adventity have acquired to gain market access.

Vendors in the space

The services offered by mortgage vendors range from loan origination to various elements of loan servicing. Some of the prominent captives in the space include such names as Bank of America, ABN Amro, Citi Group, HSBC, Countrywide Financial and Ocwen. The third party service providers include EXL, WNS, Equinox, Wipro, Firstsource and Infosys BPO.

Moving from merely offering specific and discrete services such as loan generation, collections, loan origination, vendors like Equinox and iSeva are now positioning themselves as end-to-end providers, and over time all the major players will be making a similar pitch.

Going forward…

The outsourcing opportunity in the mortgage industry is estimated to be over $30 billion. Realizing the tremendous offshore potential, there was a sense of urgency amongst Indian vendors towards building expertise and acquiring some client relationships - and the acquisition of US-based mortgage BPOs is the quickest way to achieve this . These acquisitions also provide higher-end skill-sets to the Indian vendors, who can now look at taking on more complex work such as underwriting.

Mortgage process offshoring will gain further momentum as the offshore vendors mature. However finding the right skill sets for complex tasks will emerge as a major challenge. Going forward, overseas acquisitions by Indian vendors will continue though it may take on a different hue. The targets are likely to become more diverse, including smaller companies with high levels of specialization, not only in the US but possibly also in Canada, Latin America or Europe.