Freddie Mac Servicer Conference November 14 Bulletin Freddie Mac Servicer Success Scorecard

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Oswald Woods
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1 Freddie Mac Servicer Conference 2014 November 14 Bulletin Freddie Mac Servicer Success Scorecard

2 Overview The Freddie Mac Servicer Success Scorecard (Scorecard) drives Servicer behavior consistent with desired outcomes by increasing alignment of our metrics to the Single-Family Seller/Servicer Guide (Guide). Effective date: The revised default management criteria in the Servicer Success Scorecard will be effective with a Servicer s January 1, 2015 performance. Upcoming changes: Excluding loans that are being worked through the modification process. Measuring how well you cure loans by using tools which have the least amount of impact to the borrower and Freddie Mac. Measuring the timeliness of offering foreclosure avoidance solutions. Incorporating a view of default timelines into our metrics which allows for carve out of loan level delays. As part of FHFA Directive, we are collaborating with Fannie Mae to achieve alignment on the Scorecard. 2

3 2015 Scorecard Metrics Criteria Name Criteria/ Calculation Change New Weights Old Weights Loss Mitigation 55% 65% Transition to 60+ Updated 15% 5% 60 to Worse Updated 10% 10% 90 to Better Removed -- 10% 90+ to Worse Updated 5% 10% Cure Efficiency New 10% -- Retention Efficiency Updated 10% 15% Liquidation Efficiency Updated 5% 15% Workout Effectiveness 2% 5% 12- Month Performance No Change 2% 2% 6- Month Performance Removed -- 2% Timing of Liquidation Solutions Removed -- 1% Default Management Timeline 38% 20% Average Age Past FCL Sale Standard Updated 20% 10% Beyond Timeline Resolution Rate New 18% -- Loans Beyond Foreclosure Sale Threshold Removed -- 10% Data Integrity 5% 10% Initial Delinquency Reporting No Change 0% 6% Final Delinquency Reporting No Change 0% 2% Accuracy of DDLPI Reporting No Change 5% 1% Timely REO Notifications No Change 0% 1% 3

4 Synthetic Control Variable Changes Portfolio-Based Synthetics Delinquency Status Current LTV Purpose Occupancy Previously Modified Current D30 D60 D90+ FCL < 80% 80% - 100% 100% - 120% > 120% Purchase Refinance Owner Occupied Non-Owner Occupied Yes No Bankruptcy Status No Bankruptcy Ch. 7 Bankruptcy Other Bankruptcy Enhanced Enhanced New State NY/NJ MI FL WA/OR IL DC CA MA NV All Other States Origination < > 2009 Trial Modification (< 4 Months) Yes No Within Allowable FCL Timeline Yes No New Removed Product Original UPB ARM Fixed < $100,000 > $100,

5 Synthetic Control Variable Changes Modification-Based Synthetics New Modification Type Payment Reduction State Previously Modified Pre-Mod Delinquency Status Post Mod. CLTV HAMP Standard Alt Streamline Other Increased 0% - 20% 20% - 40% > 40% CA FL IL AZ/MI GA All Other States Yes NO Current D30 D60 D90+ FCL < 80% 80% - 100% 100% - 120% > 120% 5 5

6 Example of Servicer Success Scorecard Ranks Transition to 60+ Transition to 60+ (50% Weight) Servicer Servicer - Synthetic Metric Rank Percentile Points Received Servicer A -0.35% % 50.0 Servicer B -0.25% % 33.3 Servicer C -0.20% % 25.0 Servicer D -0.03% % 16.7 Servicer E 0.01% % 8.3 Servicer F 0.15% % 0.0 Retention Efficiency Retention Efficiency (50% Weight) Servicer Servicer - Synthetic Metric Rank Percentile Points Received Servicer B 2.00% % Servicer C 1.50% % Servicer D 1.00% % Servicer E -0.50% % Servicer F -2.00% % 8.33 Servicer A -2.25% % 0.00 Servicer Total Points Servicer A 50.0 Servicer B 83.3 Servicer C 58.3 Servicer D 41.7 Servicer E 25.0 Servicer F 8.3 Servicer Total Points Rank Servicer B Servicer C Servicer A Servicer D Servicer E Servicer F

7 Other Guide Bulletin Topics State Foreclosure Time Lines State Foreclosure Time Line Compensatory Fees Servicer Success File Review Appeal Process Deed-in-Lieu of Foreclosure Incentives for Borrowers 7

8 Rollout and Resources Timing Available now December 5 Resource Single-Family Guide Bulletin Servicing Success Program Web Page- Frequently Asked Questions Preview Period begins You will receive Preview Period communications 2015 Scorecard Program Changes Reference Guide on the Learning Center Registration is open for webinar training that begins 1/13 Early January Updates to the Servicing Success Program Web page (new content) January Scorecard Program Changes Webinar on the Learning Center March 6 New Scorecard is Available Communications Updated Scorecard Reference Guide and Webinar 7

9 Questions?

TO: Freddie Mac Servicers November 14,

TO: Freddie Mac Servicers November 14, 2014 2014-19 SUBJECT: SERVICING UPDATES (This is a reissuance of Bulletin 2014-19, with corrections to the section titled Default management criteria comparison and