Thursday, July 28, 2011

Freddie Mac Announces New Servicer Success Program

Freddie Mac announced its new Freddie Mac Servicing Success Program 7/25/11. The program features two major components – the Servicer Success Scorecard and the Servicer Success File Reviews – designed to further the GSE’s efforts to track and recognize “servicing excellence.” Freddie Mac’s new scorecard replaces the former tier-rating structure with performance rankings that measures servicers’ success relative to one another.

The second component of the program, the Servicer Success File Reviews, will identify potential challenges with servicers’ loss-mitigation actions.

The Freddie Mac Servicing Success Program is effective August 1, and servicers will be able to access their new scorecard on Freddie Mac’s Servicer Performance Portfolio website October 7.

Proxy credit scores for the Home Affordable Modification Program’s (HAMP) Net Present Value have changed. Effective immediately, for HAMP-eligible Mortgages where no Borrower has an available credit score,the Servicer must use 557 as a proxy credit score when performing the Treasury NPV Model evaluation.

Furthermore, if a Borrower has a credit score, but it is below 250, the Servicer should input 250 as the
credit score into the Treasury NPV Model. Documentation of an unavailable credit score, or a credit score
below 250, must be retained in the Mortgage file and provided to Freddie Mac upon request. The proxy
credit score and the minimum credit score of 250 rules may not be used as an input into Imminent Default