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Freddie Mac Servicing Success Program

How We Define, Measure, and Recognize Servicing Excellence

The Servicing Success Program includes multiple components that offer a well-rounded view of your performance, provide a broad and in-depth analysis of your servicing of performing and non-performing loans, and support 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

  • Program components emphasize a mutual understanding of performance expectations, strengths, challenges, and opportunities for improvement, matched with dialogue about how you manage your Freddie Mac portfolio.
  • Comprehensive goals that provide focus for servicing your portfolio of performing and non-performing loans.
  • Working in concert with the Federal Housing Finance Agency and Fannie Mae, we created common performance criteria and standards that became effective January 1, 2013, so that you can focus on activities that are important to both GSEs.
  • Performance criteria that measure servicing performance for the current environment.
  • Servicer Success File Reviews that augment your internal quality control review of default-management activities.
  • We continue to provide incentives for workouts, including loan modifications, short payoffs, make-whole pre-foreclosure sales, deeds in lieu of foreclosure, and repayment plans.

Program Components

  • The Freddie Mac Servicing Success Program includes the Servicer Success Scorecard, Servicer Success File Reviews, and Servicer Success Rewards and Remedies.

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 category and the Default Management category of the Scorecard.

  • All Servicers' Scorecard results will be ranked in the Investor Reporting 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 eleven 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. Default management criteria in the following categories incorporate synthetic portfolios to determine ranking:
    • Loss Mitigation
    • Workout Effectiveness
    • Default Time Line Management

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/

Servicing Performance Criteria as of January 1, 2013

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+
  • 5%
  • 60 to Worse
  • 10%
  • 90+ to Better
  • 10%
  • 90+ to Worse
  • 10%
  • Retention Efficiency
  • 15%
  • Liquidation Efficiency
  • 15%
Workout Effectiveness  
  • 6-Month Performance
  • 2%
  • 12-Month Performance
  • 2%
  • Timing of Liquidation Solutions
  • 1%
Default Time Line Management  
  • Loans Beyond Foreclosure Sale Threshold
  • 10%
  • Average Age of Past Foreclosure Sale Standard
  • 10%
Data Integrity  
  • Initial Delinquency Reporting Edits
  • 6%
  • Final Delinquency Reporting Edits
  • 2%
  • Accuracy of DDLPI Reporting
  • 1%
  • Average Days to Report Foreclosure Sales
  • 1%

Exclusions to Default Management Criteria

We will exclude certain mortgages from the following 2013 servicing performance criteria results:

  • 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)
  • Timely REO Notification:
    • Redemptions, REO rollbacks and approved waivers
  • Default Time Line Management
  • The performance criteria Loans Beyond Foreclosure Sale Threshold and Average Age of Past Foreclosure Sale Standard measure three distinct populations of mortgages:
    1. Loans 180 or more days delinquent or foreclosed
    2. Short sales and deeds-in-lieu
    3. REOs

    We will exclude mortgages in the following process sub-statuses from the performance measurement of loans 180 or more days delinquent or foreclosed:

    • Military indulgence
    • Agency delay
    • Foreclosure sale (third party, HUD conveyance, recourse, REO pending)
    • Open REO
    • Settled REO
    • Internal delay
  • In the other populations (i.e., mortgages resulting in a short sale, deed-in-lieu, or REO) mortgages with these process sub-statuses will be included in the Loans Beyond Foreclosure Sale Threshold and Average Age of Past Foreclosure Sale Standard performance criteria. Mortgages reported with allowable foreclosure time line delays will also be included in all of the populations of mortgages measured under these criteria.

Training

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 compliment the other components of the Servicing Success Program by encouraging and rewarding quality servicing and discouraging poor performance.

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 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.

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 a Freddie Mac servicing representative.
  • Review Guide Exhibit 96, Servicing Incentives and Compensatory Fees

Servicing Success Program Login

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