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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.

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 at http://www.freddiemac.com/singlefamily/service/

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

Investor ReportingWeight
Cash Management
  • Shortage Percentage
  • 35%
Data Integrity and Operational Management
  • Percent Hard Rejects* Over 90 Days Old
  • 10%
  • Percent Soft Rejects** Over 90 Days Old
  • 10%
  • Percent of Hard Rejects* which Occurred in Reporting Cycle to Total Loans In Portfolio
  • 15%
  • Percent of Soft Rejects** which Occurred in Reporting Cycle to Total Loans In Portfolio
  • 5%
  • Percent of Ending Hard Rejects* to Total Loans in Portfolio
  • 10%
  • Average Number of Days to Report Payoffs
  • 15%
*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.

Default ManagementWeight
Loss Mitigation  
  • Transition to 60+
  • 15%
  • 60 to Worse
  • 10%
  • 90+ to Worse
  • 10%
  • Cure Efficiency
  • 10%
  • Retention Efficiency
  • 10%
  • Liquidation Efficiency
  • 5%
Workout Effectiveness  
  • 12-Month Performance
  • 2%
Default Time Line 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
  • 5%
  • Timeline REO Notifications
  • 0%

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. You earn points for performance in each 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 both the Investor Reporting category and 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, and ranked against their peer group:
    • 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.
  • A Servicer's Scorecard results will be ranked 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 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.

Training

For More Information

  • Review Single-Family Seller/Servicer Guide (Guide) Bulletin 2014-19.
  • Review our Frequently Asked Questions.
  • Contact your Freddie Mac representative.
  • Review Guide Exhibit 96, Servicing Incentives and Compensatory Fees.

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

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

2015 Scorecard FAQs

General Questions

  1. How will the 2015 updates change the Freddie Mac Servicer Success Scorecard look and feel?
  2. Are you making the same exclusions to the Default Management criteria within the synthetic portfolios?
  3. Will Freddie Mac continue to track performance for any of the deleted Default Management criteria?
  4. How will suspended foreclosure compensatory fees be reflected in the Scorecard?
  5. Can I see my current portfolio performance using the new metrics?

Criteria and Weights

  1. Why did you remove the "90 to Better" criteria?
  2. Why exclude loans past the foreclosure timeline standard for the Cure Efficiency ratio?
  3. Why not include loans that are 60 days delinquent in Liquidation Efficiency?
  4. Will loans in loss mitigation that are not yet approved for a Trial Period Plan be excluded from Scorecard?
  5. You're removing Trial Period Plans that are less than or equal to four months old from the denominator of the Default Management criteria calculations. Is the four month criteria based on Trial Period Plan Effective date or Trial Payment date?
  6. Why did you remove the 6-month Performance metric?
  7. Where can Servicers see details of what’s included in the foreclosure timeline calculation?
  8. Are bankruptcies included within the allowable foreclosure timeline?

Synthetics

  1. Are you changing how you determine a Servicer’s synthetic portfolio?
  2. Will you provide detail to the synthetic portfolio, such as loan level information?
  3. Will sub-Servicers have a synthetic portfolio?
  4. Are all Scorecard performance criterion compared to the synthetic portfolio?

Rankings

  1. Why are some of the Data Integrity criteria weighted at zero percent?
  2. Will a Servicer know which peer group they are in and their specific rank?
  3. How will I know my rank position during the preview period (December 5, 2014-March 6, 2015)?
  4. How can I find out my rank against all Servicers, not just in my peer group?

General Questions

  1. How will the 2015 updates change the Freddie Mac Servicer Success Scorecard look and feel?

    The Scorecard will look the same except for the additions or deletions of certain criteria. Additionally, all Servicers will see "Rank" and "Percentile" columns for their rank position within their peer group. However, Freddie Mac will not identify the other Servicers within a Servicer’s peer group.

  2. Are you making the same exclusions to the Default Management criteria within the synthetic portfolios?

    Yes.

  3. Will Freddie Mac continue to track performance for any of the deleted Default Management criteria?

    Yes. This information will continue to be available to Servicers in the Servicer Performance Profile in the Supplemental Scorecard Criteria report.

  4. How will suspended foreclosure compensatory fees be reflected in the Scorecard?

    Suspended foreclosure compensatory fees will be reflected in the billing you receive from Freddie Mac for such fees. The Scorecard will continue to apply existing timelines for each jurisdiction. However, in order to better account for the current timelines in these jurisdictions, we have updated the synthetic State control variable to ensure you're your synthetic portfolio composition matches that of your portfolio. This should ensure that you’re not being adversely impacted by loans in these areas.

  5. Can I see my current portfolio performance using the new metrics?

    Yes the intent of the preview period is to allow you to see your current portfolio through the new metrics. For example, in December, the preview period will show your October 2014 performance using the 2015 Servicer Success Scorecard criteria.

Criteria and Weights

  1. Why did you remove the "90 to Better" criteria?

    This is part of our effort to streamline Scorecard criteria. "90 to Worse" is the opposite situation of "90 to Better". Since we want Servicers to focus on preventing loans from rolling to a worse stage of delinquency, we removed the "90 to Better" criteria

  2. Why exclude loans past the foreclosure timeline standard for the Cure Efficiency ratio?

    We made this change to differentiate between standard loans and aged inventory loans. Loans that are past the foreclosure timeline standard are included in the new metric Beyond Timeline Resolution Rate.

  3. Why not include loans that are 60 days delinquent in Liquidation Efficiency?

    We're using loans that are 90 or more days delinquent because these loans are more likely to result in a liquidation option.

  4. Will loans in loss mitigation that are not yet approved for a Trial Period Plan be excluded from Scorecard?

    No, we only exclude initiated Trial Period Plans.

  5. You're removing Trial Period Plans that are less than or equal to four months old from the denominator of the Default Management criteria calculations. Is the four month criteria based on Trial Period Plan Effective date or Trial Payment date?

    Trial Period Plan Effective date.

  6. Why did you remove the 6-month Performance metric?

    Servicers can see their workout effectiveness over a longer period of time with the 12-month Performance metric.

  7. Where can Servicers see details of what's included in the foreclosure timeline calculation?

    Depending on the specific criteria, we include delinquent loans, state foreclosure timelines, and allowable delays. For such criteria, the Loan Level Details reports that are available via the Criteria Details pages provide timeline details. Additional loan level information is also available within the Manager Series.

  8. Are bankruptcies included within the allowable foreclosure timeline?

    Yes. We add them to state foreclosure timelines.

Synthetics

  1. Are you changing how you determine a Servicer’s synthetic portfolio?

    No, the way we determine a synthetic portfolio to calculate a Servicer's rank is not changing. We are changing certain variables that control the make up of a synthetic portfolio, including removing product and original unpaid principal balance and adding trial modifications, previously modified loans, and allowable foreclosure timeline. Refer to the Freddie Mac Servicing Success Program Reference Guide for a complete list of synthetic portfolio variables.

  2. Will you provide detail to the synthetic portfolio, such as loan level information?

    We cannot provide loan level detail because it includes Servicer and borrower personal information. On a case-by-case basis we can provide a stratification report on the composition of the synthetic portfolio. Contact your Freddie Mac representative for more information.

  3. Will sub-Servicers have a synthetic portfolio?

    No, not at this time. Sub-Servicer performance is included in the Global family of the master Servicer’s performance.

  4. Are all Scorecard performance criterion compared to the synthetic portfolio?

    We compare your performance in Loss Mitigation, Workout Effectiveness, and Default Timeline Management to a synthetic portfolio because we have analyzed these criteria as being susceptible to portfolio composition differences. Performance for Data Integrity and Investor Reporting are not compared to the synthetic portfolio because they are driven by servicer operational efficiency or processes and procedures.

Rankings

  1. Why are some of the Data Integrity criteria weighted at zero percent?

    The adjustments to weights in the Scorecard reflect the increased importance on optimizing borrower outcomes. However, Data Integrity is still important to manage therefore we do not want Servicers to lose sight of how they perform against these metrics. We’ll continue to collect data for these criteria in order to help Servicer monitor their performance in these areas. As such, we have kept this metric in the Scorecard criteria but weighted it as zero to show the relative low importance in comparison to other metrics.

  2. Will a Servicer know which peer group they are in and their specific rank?

    Yes. Servicers will see both their rank and the number of other Servicers included in their peer group on their Scorecard.

  3. How will I know my rank position during the preview period (December 5, 2014-March 6, 2015)?

    Rank information is not available during the preview period in the Servicer Performance Profile, however, if you service 25 or more loans that are 90 days or more delinquent, you can request a preview of your rank information from your Account Manager or Customer Support (800-FREDDIE). This information will be available beginning December 12.

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

    We are not ranking Servicers against other Servicers that are not in their peer group. We segmented all Servicers into peer groups to ensure we are ranking servicers against other servicers who are similar to them in portfolio composition.

For More Information

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

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