Servicers faced intense scrutiny over the past four years, prompting the government-sponsored enterprises to find ways to foster excellence in servicing.
Fast forward to today and Fannie Mae has awarded five servicing firms “Four STAR Designations,” citing their operational and performance achievements in working with borrowers.
The GSE released the results for Fannie Mae's 2012 Servicer Total Achievement and Rewards Program, giving four servicing firms – Fifth Third Bank (FITB), Associated Bank, Green Tree Servicing, Navy Federal Credit Union and Seterus – a Four STAR Designation. The highest possible rating is the five star designation.
The STAR program, which is only two years old, evaluates servicers on operational and performance metrics, comparing them to their peers and awarding designations to top performers who succeed in meeting customer service, operational and foreclosure prevention targets.
This is the first time any servicer has achieved a four STAR designation.
Leslie Peeler, senior vice president of Fannie Mae’s National Servicing Organization, says the program looks at two components: there’s an operational assessment as well as the performance scorecard.
After the first survey in 2011, Fannie provided a great deal of feedback to servicers on how to achieve better ratings on the operational assessment and Peeler believes that focused resulted in hightened performances among today's distinguished servicers.
"We saw servicers benefit from that advice," she told Housingwire. Peeler notes that the housing agency saw servicers perform at the highest level on the performance scorecard in 2011, but growth on the operational side is where the top firms gained their competitive edge in 2012.
"In 2012, servicers had the benefit (after a year of the program) of understanding what Fannie Mae’s criteria was for achieving a higher level of performance," Peeler noted.
She says the biggest areas of improvement for servicers with Four-Star designations occurred in solutions delivery, including helping homeowners with home retention and loss mitigation options.
"It is a sign of great progress to award four STAR designations for the first time," Peeler said. "Servicers are continuing to improve their processes and achieve better results in foreclosure prevention and customer service. We look forward to working with all servicers to build on their strong momentum and make sure that homeowners are getting the help they need."
Other servicers watching this year’s report can benefit from gains made at the Four Star level, Peeler suggested, including those at the Three STAR level who are growing in their efforts.
Servicers achieving a "Three STAR Designation" include Capital One; Colonial Savings; EverBank; GMAC Mortgage (Ally Bank); M&T Bank Co.; Nationstar Mortgage; PHH Mortgage Corp.; RBS Citizens; Regions Bank; Third Federal Savings and Loan; Trustmark National Bank; and Wells Fargo Bank.
The program launched at a time when servicing quality became a top concern for the industry.
"We wanted to make sure servicers knew what our goals and expectations were," Peeler remembers. "We wanted to provide them with data by measuring things like customer servicer and loss mitigation."
Peeler added, "Overall, servicers are getting better," and the STAR program is credited for helping the GSE "focus its conversation with servicers."