Freddie Mac Servicing Success Program

Servicer Success Scorecard

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

For Freddie Mac Servicers with mid- to small-size servicing books, your Scorecard contains the measurements accessed each month in the Servicer Performance Profile.

For Servicers with large servicing books and high volume, your Scorecard includes an additional component of individualized objectives and goals based on your portfolio, as well as a Freddie Mac Servicer Success Account Plan.

Ranking

A ranking structure takes into account the criteria and weightings in the Scorecard. Servicers earn points for performance in each criterion. On a monthly basis, we will use each Servicer's accumulated points to rank the Scorecard results relative to other ranked Servicers for both the investor reporting and remitting category and the default management category of the Scorecard.

• All Servicers' Scorecard results will be ranked in the investor reporting and remitting category.
• A Servicer's Scorecard results will be ranked in the default management category of the Scorecard only if the Servicer services a minimum amount of seriously delinquent mortgages for Freddie Mac. 
• Servicers with individualized performance goals and objectives, generally Servicers with the largest Freddie Mac Servicing portfolios, are not included in the rankings and instead are measured against individual Servicer-specific objectives.
• We utilize a synthetic portfolio and measure the difference between your performance and that of your synthetic portfolio in five of the default management criteria to minimize the impact that portfolio composition differences among Servicers may have on rankings. A synthetic portfolio is a portfolio that replicates your portfolio with respect to certain mortgage characteristics such as delinquency status, geographic location, current loan to value, mortgage purpose, product type, year of origination, original unpaid principal balance amount, and occupancy status. The following default management criteria incorporate synthetic portfolios to determine ranking:
  • Early Collections Roll Rate
  • Late Collections Roll Rate
  • D60+ Workout to D60+ Inventory
  • D90+ Loans Past Foreclosure Referral Standard
  • Inventory Past Standard

A Servicer will be presumed to have an unacceptable Scorecard result if the Servicer's ranking is in the bottom 25 percent of all ranked Servicers. 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.

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/tools.html. 

Servicing Performance Criteria

Investor Reporting and Remitting	Weight
Cash Management Shortage Percentage Custodial Account Review Score	45% 30% 15%
Data Integrity Management Percentage of Aged Applied Transactions in Error Greater than 60 Days (rolling 3 months)	15% 15%
Operational Management Percentage of Transactions in Error (rolling 3 months) Average Days to Report Payoffs	40% 25% 15%

Default Management	Weight
Loss Mitigation Early Collections Roll Rate (rolling 3 months) Late Collections Roll Rate (rolling 3 months) D60+ Workout to D60+ Inventory (rolling 3 months)	60% 10% 20% 30%
Default Time Line Management D90+ Loans Past Foreclosure Referral Standard (rolling 3 months) Mortgage Inventory Past Standard (rolling 3 months)	20% 10% 10%
Data Integrity Initial EDR Edits Sixth Business Day EDR Edits Accuracy of Due Date of Last Paid Installment (DDLPI) Reporting Average Number of Days to Report Foreclosure Sales	20% 5% 5% 5% 5%

Default Management Criteria

Early Collections Roll Rate
The Early Collections Roll Rate criterion is the difference between the Servicer's share of its 30-day delinquent mortgage population that transitions to a further state of delinquency in the next month, over a rolling three-month time period, and the Servicer's synthetic portfolio share that transitions to a further state of delinquency over the same time period. (A synthetic portfolio matches the composition of the target Servicer based on key mortgage characteristics and enables Freddie Mac to adjust for portfolio composition differences between Servicers.) HAMP and Freddie Mac Standard Modification Trial Period Plans are excluded.

Late Collections Roll Rate
The Late Collections Roll Rate criterion is the share of mortgages 90 or more days delinquent that transition to a further state of delinquency in the next month, over a rolling three-month time period. HAMP and Freddie Mac Standard Modification Trial Period Plans and mortgages in foreclosure are excluded.

D60+ Workout to D60+ Inventory
The D60+ Workout to D60+ Inventory criterion is the ratio of workouts on mortgages that are 60 or more days delinquent (i.e., Freddie Mac Standard Modification and HAMP official/Trial Period Plan, short sale, deed-in-lieu, or repayment plan) completed in a given month, to the 60 or more days delinquent mortgage inventory from the prior month, over a rolling three-month time period

D90+ Loans Past Foreclosure Referral Standard
The D90+ Loans Past Foreclosure Referral Standard criterion is the percentage of mortgages in a Servicer's portfolio that are 90 or more days delinquent with no delays that have exceeded the foreclosure referral standard identified in the Guide over a rolling three-month time period.  

Inventory Past Standard
The Inventory Past Standard criterion measures, for mortgages in a Servicer's portfolio that are over standard, how far over standard those mortgages are on average, over a rolling three-month time period.

Training

• Participate in Servicing Success Training – New
• Download the Servicing Success Program Reference Guide – New

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. However, submission of requested file documentation that you initially failed to provide will not be considered during the appeal process.

Servicer Success Rewards and Remedies

Servicer Success Rewards and Remedies compliments the other components of the Servicing Success Program by encouraging and rewarding quality servicing and discouraging poor performance.

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 new and revised 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.

• Data Accuracy: Beginning June 1, 2012, we are changing fees for fulfilling a Servicer’s request for assistance with data research and reconstruction from a per loan amount to an hourly rate, or the actual costs if a third party is engaged.
• Reporting and Process Integrity:
  • Beginning September 1, 2012, if you fail to report at least 75 percent of your loan portfolio by the fifth business day after the accounting cycle cutoff, you will be assessed an increased Reporting Noncompliance Fee. Fees range from $5,000 to $15,000 depending on occurrence.
  • Beginning June 1, 2012, if you fail to take the necessary measures to prevent an REO rollback, you will be assessed a new compensatory fee of $1,000 for each REO rollback.

A key focus of quality servicing is reducing the number of foreclosed mortgages, and workouts play a critical role in responsible default management. You will continue to receive quality servicing incentives for non-HAFA short payoffs, make-whole pre-foreclosure sales, and deeds-in-lieu; non-HAMP repayment plans; Standard Modifications; HAMP Modifications; HAFA deeds-in-lieu and short sales; and Borrower Response Packages.