Fannie Mae has announced a new program to measure and evaluate the performance of its servicers' actions toward helping homeowners avoid foreclosure.  The Servicer Total Achievement and Rewards Program or "STAR" is designed to directly link servicer performance in assisting homeowners to the customer's experience with that assistance. 

In a speech to the Mortgage Bankers Association earlier this week, Edward J. Demarco, acting director of the Federal Housing Finance Administration (FHFA) signaled that such a program would be forthcoming.  He told the audience attending a national servicers' conference that FHFA had established working groups with Fannie Mae and Freddie Mac, for which it is conservator, to align servicing standards and establish rewards for servicers for early engagement with borrowers. STAR seems to be the first product from those working groups.  

Fannie Mae says STAR lays out clear expectations for servicer performance and provides consistent measurements of that performance.  The Servicer Performance Scorecard, a key component of STAR, provides monthly performance snapshots and trends for key performance indicators to help servicers effectively assess their progress.  Servicers who score well on the evaluations will be eligible for performance awards and recognition and rankings of top performers will be available to the public by way of an annual scorecard.

"We created the STAR Program to promote transparency, accountability and excellence in mortgage servicing and to recognize those which consistently deliver strong, customer-driven results," said Leslie Peeler, Vice President of Servicing Portfolio Management. "The efforts of servicers are critical to preventing foreclosures and providing homeowners assistance. By creating measurable expectations for our servicers aligned with Fannie Mae's business objectives, we hope to sharpen servicers' focus and encourage them to continue to work with us toward our shared priority: keeping people in their homes."