The Industry Standard for Default Management Technology
Freddie Mac will not be registering new customers for EarlyIndicator®. In addition, as of March 29, 2014, Freddie Mac will no longer offer our EarlyIndicator software to Servicers or service bureaus.
EarlyIndicator is a software application that incorporates statistical models to predict the likelihood that a delinquent loan will be resolved, or that it will advance through to a loss-producing state, and ultimately to REO. EarlyIndicator can be used to score all of the delinquent mortgages in your portfolio, including conventional, FHA/VA and subprime loans, as well as mortgages in foreclosure.
By implementing EarlyIndicator and incorporating the EarlyIndicator score into your monthly call campaigns and loss mitigation strategies, you will be able to effectively prioritize your monthly call campaign and loss mitigation activity by focusing on the mortgages that pose the greatest risk of default.
- Use it to risk-rank all of the delinquent mortgages in your portfolio (conventional, government, and subprime)
- Prioritize your monthly loss mitigation activity
- Receive maximum operational benefits by using our Work Rules
EarlyIndicator is a delinquency scoring system designed to help you:
- Reduce credit losses
- Help borrowers avoid foreclosure
- Greatly improve the efficiency of your call campaigns
- Improve the efficiency of delinquency management operations
- Make decisions that are timely, objective, consistent, and comprehensive
Like our commitment to making affordable mortgage credit available in all communities at all times, Freddie Mac is committed to helping borrowers sustain homeownership and avoid preventable losses. One of the ways we deliver on that commitment is by developing technology tools that enable Servicers to work effectively with defaulted borrowers. When you implement and utilize EarlyIndicator on a monthly basis, borrowers benefit because:
- Top priority is given to contacting borrowers with the greatest risk of going deeper into delinquency and possibly losing their homes. Early identification and contact may broaden the opportunity to offer foreclosure alternatives.
- You can avoid unnecessary calls to over 80% of those borrowers who are good payers by timing your call campaigns; e.g., utilizing the suggested EarlyIndicator collection campaign calendars.
- EarlyIndicator's insight into a borrower's past payment behavior can help you develop effective and appropriate communication strategies for each borrower.
- When used in conjunction with Workout Prospector®, borrowers receive timely, consistent, non-subjective, quality assistance to ensure the highest likelihood of a lasting resolution to their delinquency.
To produce a score, EarlyIndicator uses:
- The borrower's payment history on the actual mortgage being scored
- An estimate of the current market value of the property from Freddie Mac's industry-leading home valuation models
- Local-market economic data
- Other borrower and mortgage characteristics
After the age of a loan's delinquency is determined, a Collection or Loss Mitigation scoring model is invoked and generates one of the following scores.
- An EarlyIndicator Collection score, ranging from 000/F to 099/A (000/F representing the highest risk), measures the likelihood that a mortgage due for one payment will become due for two payments.
- An EarlyIndicator Loss Mitigation score, ranging from 101/F to 400/A (101/F representing the highest risk), measures the likelihood that a mortgage due for two or more payments, including a mortgage in foreclosure, will result in a borrower losing their home.
Generally, Servicers using the EarlyIndicator collection scores queue their newly delinquent loans, which are due for one payment, into an automated dialer. They also utilize the Freddie Mac suggested EarlyIndicator collection campaign calendars to plan their monthly call campaigns by collection score range.
The loss mitigation scores are used in the loss mitigation solicitation process to target those borrowers most likely to lose their homes. Early identification of these borrowers may broaden the opportunity to offer foreclosure alternatives.
Maximize Your Operational Benefits
To ensure that Servicers receive the maximum operational benefits from using EarlyIndicator, we developed a set of Work Rules. Our Work Rules, which are available for any licensed user, serve to greatly increase process efficiencies and provide cost savings to Servicers using this comprehensive and predictive default management tool.
If You are Already Using EarlyIndicator
If you've already completed the EarlyIndicator contract and are using the application, please visit the Using EarlyIndicator Web page. This Web page provides you with the user guide, collection calendar information, EarlyIndicator Work Rules and more.