TowerGroup, the US research firm, believes that offshoring and offshore outsourcing in India and other countries will help the US mortgage lending industry to lower total origination costs per loan by 6% on average by 2008, and will ultimately reduce total direct loan origination and loan servicing costs by 2%-4% by 2010. Craig Focardi, senior analyst at TowerGroup and author of the research, said: “The hype regarding 25%-50% offshore cost savings may be true for individual sub-processes but it ignores the fact that lenders will neither offshore their entire loan origination or servicing process, nor offshore their entire book of business. “Return on investment and cost savings estimates must include a careful assessment of start-up investments, marginal costs necessitated by the offshoring initiative, and overheads.”