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Freddie Mac Servicing Success Program

The Freddie Mac Servicing Success Program offers a well-rounded view of your performance, provides a broad and in-depth analysis of your servicing of performing and non-performing loans, and supports ongoing discussions regarding performance strengths and challenges. The program focuses on all aspects of mortgage servicing and aligns with the overall objectives of the Servicing Alignment Initiative to improve Servicer performance through defined metrics, benchmarks, requirements, financial incentives, and compensatory fees.

Servicer Benefits

  • Together with the Federal Housing Finance Agency and Fannie Mae, we created common performance criteria and standards that became effective January 1, 2015, so that you can focus on activities that are important to us.
  • Comprehensive goals that provide guidance for servicing your portfolio of performing and non-performing loans.
  • Servicer Success File Reviews that augment your internal quality control review of default-management activities.
  • Incentives for workouts, including loan modifications, short payoffs, make-whole pre-foreclosure sales, Freddie Mac Standard Deeds-in-Lieu of foreclosure, and repayment plans.

Important Update

2017 Servicer Success Scorecard
New Look, New Gears to Drive Performance

November 30, 2016 – Through February 28, get to know the new and improved Scorecard during the preview period.

  • Watch our high-level overview video to get familiar with the new workflow and design.
  • Log in to preview your October 2016 performance.
  • Need help? Review the new reference guide for detailed instructions on how to navigate and use the redesigned Scorecard.

Once you've experienced the 2017 Scorecard for yourself, we'd like to know your initial impressions and would appreciate your feedback in one or two words.

We'll update this web page to reflect the 2017 Scorecard before your first monthly Scorecard is available in February 2017.

Servicer Success Scorecard

The Freddie Mac Servicer Success Scorecard provides you with comprehensive measurements in multiple categories, and assesses your results in the defined categories each month.

Access

You can securely access your confidential Scorecard in the same location that you access your Servicer Performance Profile.

Click here to see Servicing Performance Criteria as of January 1, 2015

Default ManagementWeight
Loss Mitigation  
Transition to 60+ 20%
60 to Worse 10%
90+ to Worse 10%
Cure Efficiency 10%
Retention Efficiency 10%
Liquidation Efficiency 5%
Workout Effectiveness  
12-Month Performance 2%
Default Timeline Management  
Beyond Timeline Resolution Rate 20%
Average Age of Past Foreclosure Sale Standard 18%
Data Integrity  
Initial Delinquency Reporting 0%
Final Delinquency Reporting 0%
Accuracy of DDLPI Reporting 0%
Timeline REO Notifications 0%
Investor ReportingWeight
Cash Management
Shortage Percentage 0%
Data Integrity and Operational Management  
Percent Hard Rejects* Over 90 Days Old 0%
Percent Soft Rejects** Over 90 Days Old 0%
Percent of Hard Rejects* which Occurred in Reporting Cycle to Total Loans In Portfolio 0%
Percent of Soft Rejects** which Occurred in Reporting Cycle to Total Loans In Portfolio 0%
Percent of Ending Hard Rejects* to Total Loans in Portfolio> 0%
Average Number of Days to Report Payoffs 0%
*Hard Rejects are outside of system tolerance and are not automatically cleared; Servicer intervention is required to correct a hard reject.
**Soft Rejects are within system tolerance and are automatically cleared by the system; Servicer intervention is not required to correct a soft reject.

Exclusions to Default Management Criteria

We will exclude certain mortgages from the following Default Management criteria results:

  • All Default Management criteria with the exception of Data Integrity criteria:
    • Loans guaranteed by the Federal Housing Administration (FHA), Department of Veterans Affairs (VA), or United States Department of Agriculture (for mortgages originated under the Rural Housing Service Section 502 Guaranteed Loan Program)
  • Transition to 60+, 60 to Worse, and 90+ to Worse
    • Loans that you are currently working through the modification process
  • Timely REO Notification:
    • Redemptions, REO rollbacks and approved waivers

Ranking

A ranking structure takes into account the criteria in the Scorecard and their weights, if applicable. If sufficient data is available to calculate performance, you earn points for performance in each eligible criterion. On a monthly basis, we will use your accumulated points to rank the Scorecard results relative to other ranked Servicers in your peer group for the Default Management category of the Scorecard.

  • Servicers will be placed into one of the peer groups based on the following characteristics of their portfolio:
    • Top 10 Servicers as determined by the total number of mortgages serviced for Freddie Mac.
    • Servicers servicing 25 or more mortgages for Freddie Mac that are 90 or more days delinquent and that are not in the previous peer group.
    • Remaining Servicers that are not in the above two peer groups.
  • However, a Servicer's Scorecard results will be ranked against its peer group in the Default Management category of the Scorecard only if the Servicer services 25 or more mortgages for Freddie Mac that are 90 or more days delinquent or in foreclosure.

We use a synthetic portfolio to minimize the impact that portfolio composition differences among Servicers may have on rankings. A synthetic portfolio is a portfolio that replicates a Servicer's portfolio with respect to certain mortgage variables such as delinquency status, geographic location, current loan-to-value, mortgage purpose, year of origination, and occupancy status. A Servicer will be presumed to have an unacceptable Scorecard result if the Servicer's ranking in the Default Management category is in the bottom 25 percent of Servicers in your peer group. Low rankings will be reviewed for possible remedial action.

Confidentiality

Scorecards and rankings are confidential and communicated individually. Each Servicer's name and data will remain confidential and will not be shared with other Servicers. A Servicer's Scorecard may only be shared upon receipt of Freddie Mac's written permission.

For More Information

Servicer Success File Reviews

Servicer Success File Reviews identify your servicing performance gaps and trends through assessment of a sampling of your delinquent loan files. This process is designed to help you identify and resolve issues that prevent you from achieving top performance.

You will receive written notice from Freddie Mac to initiate a File Review. The notice will provide direction on what to submit, as well as how and where to submit file information. It is essential that you submit all requested documentation in its entirety by the date specified in the request. Once Freddie Mac provides a written conclusion, you will have an opportunity to appeal the findings up to 15 business days after the date of our written conclusion.

If the defect was the result of a missing or incorrect document, that document may be submitted by appeal to support clearing the defect. However, if you failed to submit any documents in response to our initial File Review request, and the overall result is "Fail – Missing Docs," the mortgage is not eligible for an appeal. Freddie Mac, in its sole and absolute discretion, may choose to rely on its conclusions or upon any other available information in determining whether to pursue any other right or remedy available to Freddie Mac under the Purchase Documents or applicable law.

For More Information

  • Contact your Freddie Mac representative.
  • Review Guide Exhibit 96, Servicing Incentives and Compensatory Fees.

Servicer Success Rewards and Remedies

Servicer Success Rewards and Remedies compliment the other components of the Servicing Success Program by encouraging and rewarding quality servicing and discouraging poor performance. Reducing the number of foreclosed mortgages and workouts plays a critical role in responsible default management.

Remedies incorporate compensatory fees as a tangible consequence of poor data quality and servicing processes. These fees reinforce our Guide requirements, and also recover costs incurred by Freddie Mac as a result of a Servicer not adhering to our requirements for servicing mortgages. Strong servicing performance, including quality servicing, sound processes, and accurate data, prevents the assessment of compensatory fees.

The compensatory fees that make up the remedies portion of the program focus on improving data quality and reporting to help our organizations achieve greater consistency and efficiency in servicing Freddie Mac mortgages.

For More Information

  • Visit the Selling Representation and Warranty Framework web page to view the Independent Dispute Resolution (IDR) document referenced in Guide Bulletin 2016-14 and the Guide, and check this web page for the latest IDR process updates.
  • Review our Servicing Remedies Framework – FAQs for illustrative examples describing how we determine the appropriate Servicing Remedy and the calculation of such remedy.
  • Contact your Freddie Mac representative.
  • Review Guide Exhibit 96, Servicing Incentives and Compensatory Fees.

Scorecard FAQs

General

  1. When will the new Scorecard be available?
  2. When will you update applicable training and reference documents to incorporate the 2017 Scorecard changes?
  3. Will Freddie Mac continue to track performance for any of the deleted default management metrics?
  4. When will you publish the new Scorecard each month?
  5. How will transfers of servicing impact the new Scorecard?
  6. How will the Investor Reporting Change Initiative impact the new Scorecard?

Metrics and Weights

  1. Can you provide some insights into why you added new default management metrics?
  2. Will you exclude loan workouts that are not yet approved for Trial Period Plans from default management metrics?
  3. You're removing Trial Period Plans that are less than or equal to four months old from default management metrics – is that based on Trial Period Plan effective date or Trial Period payment date?
  4. If a bankruptcy and a Trial Period Plan are reported simultaneously, do you extend the Trial Period Plan exclusion beyond four months?
  5. As an example, where can I see details of what loans are included/excluded in the Total Timeline Trend metric calculation?
  6. Are bankruptcies accounted for in the Total Timeline Trend metric?

Synthetics

  1. Are all 2017 Scorecard metrics compared to the synthetic portfolio?
  2. Are you changing how you construct my synthetic portfolio in 2017? What details will you provide?
  3. Will subservicers have a synthetic portfolio?
  4. Why are all of the default management metrics weighted equally?
  5. Will I be able to tell which rank group I’m in and my specific rank within that group?
  6. Why don't I have a rank for certain default management metrics?
  7. How can I find out my rank against all Servicers, not just in my rank group?

General

  1. When will the new Scorecard be available?

    You'll be able to preview the 2017 Scorecard, with October performance data, at the end of November 2016. Your first monthly 2017 Scorecard will be available on February 28, 2017, with your January performance.

  2. When will you update applicable training and reference documents to incorporate the 2017 Scorecard changes?

    We'll update the Freddie Mac Servicing Success Program Reference Guide in November, coinciding with the preview period. Additional training will be available in early 2017, before your first monthly 2017 Scorecard is published.

  3. Will Freddie Mac continue to track performance for any of the deleted default management metrics?

    Deleted metrics will not be tracked. However, you'll see several supplemental metrics in the 2017 Scorecard that are similar to the deleted metrics from the current Scorecard.

  4. When will you publish the new Scorecard each month?

    We'll publish the 2017 Scorecard on the last business day of each month with the previous month's performance results.

  5. How will transfers of servicing impact the new Scorecard?

    For the 2017 Scorecard, loans being transferred will be excluded from applicable metrics during the transfer process, and until the transfer is complete. For example, if a loan is transferred from Servicer "A" to Servicer "B" during January, then the loan will be excluded for both Servicers in their January 2017 Scorecard performance results.

    NOTE: 2017 Scorecard metrics will account for current month activity only, as we’re eliminated the rolling three-month performance period.

  6. How will the Investor Reporting Change Initiative impact the new Scorecard?

    There are no anticipated impacts at this time. However, we may make updates to the Scorecard after, or in anticipation of, the implementation of the Investor Reporting Change Initiative in 2018.

Metrics and Weights

  1. Can you provide some insights into why you added new default management metrics?
    • Transition from 30 to 60+: We’re removing the existing Transition to 60+ metric and adding the Transition from 30 to 60+ metric to provide more timely feedback on your early collection efforts, and use a more stable metric for ranking purposes.
    • Total Timeline Trend: The Total Timeline Trend metric gives month-over-month performance on exceeded state foreclosure timelines, if applicable.
    • 6-Month Modification Performance: We’ve shortened the lookback period from 12-months to 6-months to give you more timely and relevant performance data.
  2. Will you exclude loan workouts that are not yet approved for Trial Period Plans from default management metrics?

    No, we only exclude active Trial Period Plans.

  3. You're removing Trial Period Plans that are less than or equal to four months old from default management metrics – is that based on Trial Period Plan effective date or Trial Period payment date?

    Calculations are based off the Trial Period Plan effective date.

  4. If a bankruptcy and a Trial Period Plan are reported simultaneously, do you extend the Trial Period Plan exclusion beyond four months?

    Yes, Trial Period Plans reported concurrently with a bankruptcy will be excluded for up to 12 months.

  5. As an example, where can I see details of what loans are included/excluded in the Total Timeline Trend metric calculation?

    The Loan Level Detail reports, available via the Scorecard and Metrics Details pages, provide timeline details. Also, additional loan-level information is available in the Manager Series reports.

  6. Are bankruptcies accounted for in the Total Timeline Trend metric?

    Yes, reported bankruptcies will be credited in addition to the timelines.

Synthetics

  1. Are all 2017 Scorecard metrics compared to the synthetic portfolio?

    No, only your default management metrics will have a synthetic portfolio comparison because these metrics are more prone to portfolio composition differences. Performance for investor reporting metrics are not compared to a synthetic portfolio because they are driven by operational efficiencies and/or processes/procedures.

  2. Are you changing how you construct my synthetic portfolio in 2017? What details will you provide?

    No, we'll construct your synthetic portfolio to calculate your rank the same as we did in 2016 – at the portfolio level. We’ll provide you with a Stratification Report that shows your synthetic portfolio performance for certain loan attributes. Also, we're introducing metric-specific control variables, which will be listed in the Metric Detail pages and in the updated Freddie Mac Servicing Success Program Reference Guide, once available.

  3. Will subservicers have a synthetic portfolio?

    Yes, subservicers will receive their synthetic portfolio performance for each default management metric. This information will be included in their Subservicer Scorecard, which will be available later in 2017.

Rankings

  1. Why are all of the default management metrics weighted equally?

    While planning for the 2017 Scorecard, we considered the current state of servicing and Freddie Mac's strategic interests. We decided that all time periods and activities within the default management lifecycle that are reflected in the updated metrics should receive equal attention and scrutiny.

  2. Will I be able to tell which rank group I’m in and my specific rank within that group?

    Yes, you'll be able to see the other Servicers in your rank group. For Servicers who qualify for rankings, you'll see your ranks and the other Servicers included in your rank group, but not their ranks.

  3. Why don't I have a rank for certain default management metrics?

    If you are in rank groups 1 or 2 and you don't have a rank, then you don't have enough loans in default to calculate that particular metric (e.g. not having 20 or more loans to calculate your Transition from 30 to 60+ metric).

  4. How can I find out my rank against all Servicers, not just in my rank group?

    You'll only be ranked against other Servicers in your rank group.

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