The servicers scoring STAR rewards for the second half of 2011 were announced today by Fannie Mae. STAR, the Servicer Total Achievement and Rewards Program was established in early 2011 to establish standards and recognize excellence among Fannie Mae servicers in their overall performance, customer service, and foreclosure prevention efforts.
STAR uses two methods for evaluating participating servicers, operational assessment and Performance Scorecards. Fannie Mae will publish overall 2011 STAR Program annual results incorporating both elements next month.
When STAR was first rolled out we interviewed Leslie Peeler, the person who was heading the program at that time. She explained that the scorecard covers four performance categories:
- Roll rates. Measures loans progress through the various stages of delinquency.
- Solution delivery. The number of borrowers assisted, the number who are able to retain their homes, and the number of loans liquidated through foreclosure alternatives as a ratio of the universe needing help.
- Workout effectiveness. Numbers of modified loans still performing at designated milestones. Was the right solution prescribed and was follow-through appropriate?
- Time line management. Were actions performed efficiently? Was intervention timely? Was resolution timely?
For 2011, the following servicers have produced results on the STAR Performance Scorecard at or above median levels relative to peers. Those appearing for the first time are in bold.
- Peer Group One (consisting of 11 servicers) - CitiMortgage, Inc., EverBank, GMAC Mortgage, LLC (Ally Bank), JP Morgan Chase, and Wells Fargo Bank, NA
- Peer Group Two (consisting of 9 servicers) - Aurora Bank, FSB, Central Mortgage Company, Fifth Third Bank, HSBC Mortgage Corporation, The Huntington National Bank, and Regions Bank
- Peer Group Three (consisting of 13 servicers) - American Home Mortgage Servicing, Inc., Arvest Mortgage Company, Associated Bank, NA, Capital One, N.A., Colonial Savings, F.A., Doral Bank, M&T Bank, Nationwide Advantage Mortgage Co., Navy Federal Credit Union, Third Federal Savings and Loan, Branch Banking & Trust, and Sovereign Bank, FSB
Several banks that appeared on the list during the first half of the year did not appear on the current list. The Fannie Mae press release also noted that, "For the second half of 2011, PHH Mortgage Corporation demonstrated significant performance improvements and achieved at or above median levels compared to peers."
Thirty-three servicers now participate in the STAR program but additional servicers will be added this year. Fannie Mae said that, as a result, the peer groupings will change.
"Servicers in the STAR Program are changing their approach to managing Fannie Mae loans, assisting homeowners, and measuring success," said Tara Malone, Vice President of Servicer Review and Measurement, Fannie Mae. "We're pleased to report significant improvements in performance for some of our servicers over the course of 2011. Servicers have increased their focus on areas of key importance for helping Fannie Mae manage losses and prevent foreclosures, which should drive improved STAR performance in 2012."