2008 Changes to the Servicer Performance Profile

For over a decade, Freddie Mac Servicers and the industry have relied on the Servicer Performance Profiles as a respected method to measure and improve servicing performance.

We've accelerated many servicing efforts in response to critical market challenges, working with you and other industry participants to help borrowers preserve their dreams of homeownership. To maintain the profiles as a meaningful, accurate measurement and guide to continual improvement of servicing performance, we adjusted the profiles to better reflect the critical role quality default management plays in today's market.

The Default Management metrics changed effective January 1 for your 2008 performance measurements.

What Changed

• Workout-to-REO Ratio: We changed the point allocation for a completed loan modification or short payoff in the Workout-to-REO metric based on the use of EarlyIndicator®.
• Foreclosure Timeline Management: Servicers that have zero foreclosures within a rolling12-month period must achieve a Tier 2 or better rating in the Inventory Past Standard Severity measure to receive the minimum Tier 2 points.

Why We Made These Changes

• To emphasize critical areas, encourage earlier intervention in delinquencies, and show the importance we mutually place on helping borrowers avoid foreclosure
• To ensure appropriate measurement and weighting of activities that help us minimize credit losses
• To more effectively measure total default management performance aligned with industry best practices and standards