Servicer Incentive Program
We Believe Excellent Results Deserve Premium Rewards
That's why we created an incentive program to recognize the results that our Servicers achieve through their persistence, hard work and commitment to be the best. Our Servicer Incentive Program is clearly the most comprehensive and rewarding incentive program in the industry. We created this program to match the effort our Servicers are making towards the achievement of a mutually beneficial goal – quality servicing. We measure your performance and report it to you on your confidential Servicer Performance Profile. Servicer Benefits
Our Servicer Incentive Program is designed to
- Reward you for superior servicing
- Help you offset your costs of pursuing alternatives to foreclosure
- Complement our array of cutting-edge management tools
Our Servicer Incentive Program includes three components: Investor Reporting and Remitting Incentives, Default Management Incentives, and Tier One Premium Awards. Investor Reporting and Remitting Incentives
When you achieve a Tier One rating on the Investor Reporting and Remitting section of your Servicer Performance Profile in a calendar quarter, you receive incentives for three consecutive months after the Tier One status is made available. Incentives include
- Waivers of penalties for reporting non-compliance
- Reduction of penalties for cash remittance non-compliance
- Waivers of fees for database updates, research and record reconstruction
Default Management Incentives
We pay you incentives for alternatives to foreclosure, and for superior foreclosure timeline performance.
- Our Workout Incentive Program compensates you, regardless of your Tier rating, for certain settled alternatives to foreclosure. You receive incentives for loan modifications, short payoffs, make-whole pre-foreclosure sales, deeds in lieu of foreclosure, and successful repayment plans that result in full reinstatement or full payoff. For more information, please see our separate fact sheet, Workout Incentive Program, Publication 374.
- In addition, we pay you for superior foreclosure timeline performance. A foreclosure timeline is the time it takes to process a foreclosure. Because effective timeline management reduces foreclosure costs for everyone concerned, we ask you to process foreclosures promptly and efficiently. The timeline is measured in days from the due date of last paid installment (DDLPI) to the date of the foreclosure sale. Based on all foreclosures you complete in a calendar year, we measure your compliance with our foreclosure timelines, and report your tier rating to you on your Servicer Performance Profile. If your overall Default Management tier performance is
- Tier One (73 points and higher) – Incentive amounts are $8 per day per mortgage for every day you exceed the minimum performance level of 40 days past standard in “Actual Foreclosure Timelines Including Delays”
- High Tier Two (65.0 – 72.99 points) – Incentive amounts are $4per day per mortgage for every day you exceed the minimum performance level of 40 days past standard in “Actual Foreclosure Timelines Including Delays”
Tier One Premium AwardsYou'll achieve a Tier One Platinum award if you simultaneously attain Tier One ratings in both the Investor Reporting and Remitting and the Default Management categories of your Servicer Performance Profile for two quarters during a calendar year. Tier One Platinum incentives include: - Compensation, depending on the size of your portfolio, of up to $50,000 from our Performance Compensation Pool
- Technology compensation equal to an additional 25 percent of your Tier One Performance Compensation
- Waivers of transfer of servicing fees
- Waivers of annual EarlyIndicator® renewal fees of $10,000 or use the funds to acquire this innovative technology tool
- A $1,000 non-cash waiver to be used towards Freddie Mac training classes and events
- Recognition in trade publications, on FreddieMac.com and at events
Freddie Mac is committed to its small- and mid-sized community-based Servicers, and we recognize their excellence through Tier One Gold. High-performing Servicers with small seriously delinquent portfolios have the opportunity to achieve Tier One Gold recognition if they: - Achieve Tier One ratings in Investor Reporting and Remitting for two quarters in a calendar year, and
- Attain a Tier One rating in Default Management based on an average annual calculation during a calendar year, and
- Have a delinquent portfolio that averages one or more seriously delinquent loan per month.
Tier One Gold incentives include: - A Performance Bonus payout of $1,000
- A $500 non-cash waiver to be used towards Freddie Mac training classes and events
- Technology compensation equal to an additional 25 percent of your Tier One Performance Compensation
- Recognition in trade publications, on FreddieMac.com and at events
- Awards
In addition, a Servicer that has met the criteria for Tier One Platinum, Tier One Gold, or any combination of the two for four consecutive years and had no material foreclosure timeline penalties is eligible for our annual Hall of Fame award. To be eligible, your foreclosure timeline penalties must be the lesser of $25,000 or a certain percentage of the unpaid principal balance of 90+ day delinquent loans in your portfolio as of December 31 for the calendar year. Hall of Fame Servicers will receive additional incentives of up to $50,000. For More Information
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