New Performance Reports Now Available, Plus Enhancements to Workout Manager®

December 27, 2011

You may now retrieve two new reports in Default Reporting Manager^SM. The first report will help you track and monitor your performance for achieving quality right party contact with borrowers. The second report provides information on the number of complete Borrower Response Packages (BRPs) you've received, and tracks improvements in a borrower's delinquency status over a six-month period.

We monitor your performance in these categories and may use this information in our overall assessment of your performance as part of the Freddie Mac Servicing Success Program. These new performance criteria became effective on October 1 with the implementation of the joint-GSE Servicing Alignment Initiative.

Additionally, you will now find a new Chargeoff Exception Report in Workout Manager®. This new report and other enhancements offer more data to help you manage your pipeline of loans and conduct research on individual loans.

Quality Right Party Contact Monthly Monitoring Report

We have placed significant emphasis on early default intervention that includes earlier and more frequent borrower contact, and we measure your effectiveness in establishing quality right party contact to ensure that borrowers receive every reasonable opportunity to avoid foreclosure.

You may access the Quality Right Party Contact Monthly Monitoring Report in Default Reporting Manager now. This new report reflects how well you achieved the quality right party contact performance benchmark of at least 60 percent on your 120-day delinquent Freddie Mac portfolio.

To ensure that your Quality Right Party Contact Monthly Monitoring Report is accurate, it is important that each time you achieve quality right party contact with a delinquent borrower, you notify Freddie Mac via Electronic Default Reporting (EDR). As a reminder, since October 1:

You should report default action code AW and the date of the first quality right party contact established with a borrower within the first three business days of the month following the month that the first quality right party contact was established. Default action code AW is reported one time.
You should report default action code AX if any subsequent quality right party contact was made with the borrower after the initial contact was established within the first three business days of the month following the month that the subsequent contact occurred. You should continue to report default action code AX as often as it applies.

Not sure what constitutes a "quality right party contact"? Quality right party contact occurs when you establish a rapport with the borrower expressing empathy and a desire to help identify and discuss with the borrower, co-borrower or trusted adviser, such as a housing counselor, the most appropriate options for delinquency resolution. Review Single-Family Seller/Servicer Guide (Guide) Bulletin 2011-11 and Guide Sections 64.4(b) and 65.8 for full details.

Borrower Response Package Monthly Progress Report

Consistent with our approach to performance management and implementation of the Freddie Mac Servicing Success Program components throughout 2011, we set performance benchmarks for obtaining complete Borrower Response Packages (BRPs) and improving a borrower's delinquency status. We pay incentives for packages obtained and assess compensatory fees related to these benchmarks.

You may now retrieve the BRP Monthly Progress Report in Default Reporting Manager. This new report reflects your performance for improving delinquency status and obtaining complete BRPs for each delinquent borrower population that is being measured during a six-month collection period.

Looking at the population of new borrowers who become 60 days delinquent as of the beginning of a month, we measure your performance at the end of the collection period to determine what percentage of these borrowers:

Deliver complete BRPs,
Become current,
Become less than 60 days delinquent, or
Pay off their mortgage.

Incentives and compensatory fees are established based on a minimum performance benchmark of 50 percent and an incentive benchmark of 60 percent.

We pay you $500 for each complete Borrower Response Package received if you meet or exceed the 60 percent incentive benchmark.
We assess a $500 compensatory fee for each complete Borrower Response Package not received that would have brought you to the 50 percent minimum performance benchmark.
You will not receive an incentive or be assessed a compensatory fee if your performance meets the 50 percent benchmark but is less than the 60 percent benchmark.

Incentive payments or compensatory fees assessed for this performance measurement will be reflected in your monthly Servicer Non-Performing Loans Invoice beginning in April 2012.

To ensure that your BRP Monthly Progress Report is accurate, you should notify Freddie Mac via an EDR transmission with default action code H5 within the first three business days of the month following the month that you received a complete Borrower Response Package from a borrower.

Chargeoff Exception Report and Enhancements to Workout Manager

You now also have additional loan data available to you in Workout Manager to help you research and proactively cure key data discrepancies and reporting problems.

You can utilize the new Chargeoff Exception Report to help recognize when loans are not following the standard servicing process and may require follow-up. This new report indicates that we have not received the final workout settlement documents for an approved workout that has been paid off.
The Redefaulted Mod Analysis Report now includes loan-level, drill-down capability, as well as a summary for all modifications over the last five years, by modification type.
The Status Overview, Performance Overview, and Modifications Pending Update in Workout Manager now all display additional workout types, including Home Affordable Foreclosure Alternative (HAFA) short payoffs, non-HAFA short payoffs, Home Affordable Modification Program (HAMP) modifications, "classic" modifications, Standard Modifications, HAFA deeds-in-lieu, non-HAFA deeds-in-lieu, chargeoffs, third-party sales, and assumptions.

More Information

See Guide Sections 64.4 and 65.8 for information about a Servicer's obligation for establishing contact with a delinquent borrower, the scope of a quality right party contact, and the quality right party contact performance standard.
See Guide Section 65.8 for information about the complete Borrower Response Package and delinquency improvement performance standard.
Review Guide Bulletin 2011-11.
Contact your Freddie Mac representative or 800-FREDDIE and request "servicing."