green point mortgage

Case Study: Inside the Progeon-Green point Mortgage Transaction

Specialty mortgage firm Green Point Mortgage's five-year, $30 million deal to outsource some of its back-office and customer service tasks to India-based Progeny is a lot like the loan business itself. A mortgage loan involves trust that a homeowner will pay back his or her debt, a clear contract to enforce that commitment, and a calculation that the result will be profitable. Whether you are interested in the mortgage rates for Principal Mortgage or Green point Mortgage, we can help.

Novato, Calif.-based Green point Mortgage has faith in Progeon based on previous work with Progeon's parent firm Infosys, an IT services firm headquartered in Bangalore, India. Green point Mortgage and Progeon have spelled out their concerns, including data security details, in a contract. And Green point Mortgage expects to shave its loan servicing costs by 20% to 50% with the overseas outsourcing strategy.

In addition, Green point Mortgage sees in India a possible home for more of its operations. For example, Green point Mortgage CEO S.A. Ibrahim can imagine a time when U.S.-based mortgage brokers can call to ask about Green point Mortgage products any hour of the day or night, and talk with a knowledgeable company representative sitting in Progeon's Bangalore facility. "Twenty four-seven is coming to the mortgage business," Ibrahim says. "All of the sudden, the broker can interact with us around the clock."

Green point Mortgage's deal with Progeon is part of the blossoming field of business process outsourcing. Seeking to cut costs and possibly improve quality, U.S. and European corporations are sending work overseas, including duties such as data entry, accounting and contact center services. India has jumped to the forefront of this industry for reasons including its large population of educated English speakers, its low wage levels, and improving infrastructure.

Another factor gets at Green point Mortgage's decision to go with Progeon: India has established a reputation for quality software development and consulting services, and some of those internationally known companies have entered the BPO world. Progeon's parent Infosys - which employs more than 9,400 IT professionals and has annual revenues this year of $545 million - has provided IT services to heavy-hitter clients including Boeing, Apple Computer and Gap. Two years ago, Green point Mortgage hired Infosys to improve its technology and re-engineer some of its business processes. The experience helped make Ibrahim a believer. Infosys impressed Ibrahim with both its competence and its "impeccable character."

Of course, trust has to be a two-way street for a business partnership to work. Progeon also came to have confidence in Green point Mortgage's senior management, says T.V. Mohandas Pai, Progeon's chairman. Linking up with Green point Mortgage worked for other reasons as well, Pai says. "Progeon focuses on the financial services vertical and hence it made sense for us to work with Green point Mortgage. To add to this we found a meeting of minds when we realized that the Green point Mortgage management was looking at offshore BPO as a strategic opportunity to further its business … rather than just another cost-saving opportunity."

Progeon is trying to secure a place higher up the so-called value chain than other business process outsourcers who may focus on handling simple back-office transactions. It calls its service "business process management", which suggests greater sophistication than "business process outsourcing." The company's ideal client, Pai says, is a customer interested in a long-term relationship involving knowledge- or skill-intensive work.

Through Infosys's earlier contract with Green Point, Progeon had already developed a good deal of knowledge about the mortgage firm's operations. And that put another feather in Progeon's cap from Ibrahim's point of view. "The challenge of having to bring in a totally new partner and explain our business would have been far greater," he says.

Comprehending Green Point's operations is no small matter. Green Point Mortgage - whose parent is New York City-based financial services firm Green Point Financial - calls itself an "alternative" lender. Green Point loan candidates may not have ideal credit histories or plenty of cash but they have complicated financial situations. Often, they are immigrants and self-employed individuals. To serve this niche market, Green Point has come up 150 different loan programs and constantly develops new ones.

At this point, Green Point is retaining all its high-end decision-making tasks in the U.S. But the work being shipped to India is nonetheless complex. From the same loan document, Indian workers may need both to snag information for a payment-collection system and grab data for other forms that allow Green Point to lump loans together and sell them on the secondary market. "It they don't have an understanding of the mortgage business, they will not succeed," says Rajiv Kuchhal, Progeon's head of operations.

The Progeon-Green Point relationship was announced in June, and its implementation continues to require a great deal of back-and-forth communication. Three international calls a week between the parties are common, focusing on technology, operations and process issues. One hiccup has involved Progeon's training program. Progeon was spending too much time on computer navigation skills and not enough on the way the mortgage process works, says Raghu Krishnaiah, Green Point executive vice president and managing director. But Krishnaiah gives Progeon good marks for sniffing out possible problems: "They are being very proactive in identifying ways to minimize potential issues so that they don't occur," he says.

Security is one of the key issues in Green Point's deal with Progeon. For one thing, U.S. law requires financial services firms to protect the privacy of consumers' personal information. What's more, U.S. consumers are wary about their sensitive credit histories zipping around the world. When the Santa Rosa Press Democrat newspaper reported on Green Point's move to ship work to India, readers were afraid their confidential data would be less safe abroad.

To prevent any lapses, Progeon has tackled security from three different angles. First, the firm has established a separate facility for the Green Point account. Physical access to the building is given only to employees with authorized identification badges. Second, Progeon has created a secure computer network that's not connected to the rest of the Progeon or Infosys systems. For redundancy, the network connection to Green Point's U.S. offices runs along two fiber optic cables - one ultimately stretching under the Pacific and the other under the Atlantic.

Finally, Progeon is taking steps to make sure Green Point's intellectual property doesn't walk out the door with a Progeon employee. Progeon requires its workers to sign non-disclosure agreements and submit to background checks. Discussions are also held with employees about the meaning of intellectual property as well as the importance of keeping client business information private.