FAQs: Servicer Total Achievement and Rewards

The STAR Program is a performance management and recognition program based on a consistently applied framework to clearly define industry standards and leading practices.

Servicer inclusion is based on loan volumes from the following three categories:

• General Servicing
  • Total loan count greater or equal to 40,000

• Solution Delivery
  • Total loan count greater than 40,000 AND 60+ delinquency rate greater than .65% OR
  • Total loan count greater than 15,000 AND 60+ delinquency rate greater than 1.15%
• Timeline Management
  • Number of severely delinquent beyond timeline greater than 500

A servicer must meet the above inclusion criterion for a minimum of four months over the last two quarters.   The 2024 updates to the metrics will become effective January 1, 2024 and reflected in the STAR Scorecard released in February 2024.

Yes, volumes will be reviewed no more than once each quarter in the program year to determine if servicer inclusion changes are required to meet the inclusion criteria. Servicers are typically not added once the year has started, but the review and measurement categories could be modified.

For example, a STAR servicer could be included in all three categories at the start of the year, but if the servicers minimum portfolio volume falls below the criteria threshold of the Timeline Management category, then the servicer could be excluded from Timeline Management, while remaining in the STAR program categories of General Servicing and Solution Delivery.

The STAR Team selects servicers based on criteria that identifies servicers who manage higher levels of credit risk for Fannie Mae due to their total portfolio size.

Fannie Mae greatly appreciates servicer interest in the STAR Program; however, Fannie Mae does not accept servicer solicitations for inclusion. Based on trends in Fannie Mae servicing volumes, servicers may be added or removed from the STAR Program at Fannie Mae’s discretion.

Fannie Mae recognizes servicers that are achieving the outcomes measured by the STAR Program. Servicers may be recognized as a STAR Performer for the categories (General Servicing, Solution Delivery, and Timeline Management) in which they meet the STAR inclusion criteria for evaluation throughout the program year. STAR Performer recognition is determined annually based on an analysis of compliance review results and performance trends at the end of each program year.

In order to be recognized in a category, the servicer must receive a green operational assessment rating for each Process Area within the category. A green rating for a Process Area is achieved by receiving a green rating for the qualitative review and consistently performing on scorecard metrics tied to the Process Area (e.g., if a Process Area has two metrics, there would be 24 monthly opportunities in which the servicer must pass 16 months across both metrics).

Servicers who have questions about the STAR Program should contact their Fannie Mae Business Account Management Solutions (BAMS) Team, or BAMS Servicing Manager with questions regarding the STAR Performance Scorecard and the Operational Assessment process. If additional information or clarification regarding a matter related to the STAR Program is required, you may submit inquiries to the Fannie Mae STAR Mailbox.

The STAR Team makes every effort to respond within five business days.

The STAR Performance Scorecard is designed to help our servicers quickly identify opportunities for improvement by comparing a servicer’s performance relative to other servicers based on set thresholds or relative to a comparable portfolio. Overall, the Scorecard metrics monitor progress and trends against key indicators selected to reflect Fannie Mae’s current business objectives. These objectives are weighted by their current strategic importance to Fannie Mae. 

As with all STAR Scorecard information, STAR Scorecard results are confidential, and a servicer may not disclose STAR Scorecard results to any third parties by any means.

Annual updates were made to the decision tree model that creates the Comp for each metric. The following metrics were added to the supplemental metrics: Payment Deferral Efficiency, Modification Efficiency, and Six-Month Payment Deferral Performance.  

• All servicers will continue to receive all metrics where data is available at both the Master and Acting Servicer Level (where applicable)
• Metrics in General Servicing will be weighted as follows:
  • Transition to 60+ - 50%
  • Shortage Percent – 16.6%
  • Aged Recurring Hard Reject Rate – 16.6%
  • Aged Recurring Soft Reject Rate – 16.6%
• Metrics in Solution Delivery will be weighted as follows:
  • 60+ to Cure – 50%
  • Retention Efficiency – 30%
  • Six-Month Mod Performance –10%
  • Liquidation Efficiency – 10%

The 2024 updates became effective January 1, 2024, and they were reflected in the Scorecard released in February 2024. The report will only include results from January 2024 forward.

Please refer to Appendix B – Supplemental STAR Metric Definitions in the STAR Performance Scorecard White Paper available on the Fannie Mae STAR Webpage for details on the credit performance metrics.

No changes are made to the STAR Scorecard published via Fannie Mae Connect™. The STAR Performance Scorecard User Guide available on FannieMae.com includes details on how to access the STAR Scorecard.

The STAR Scorecard has adopted a conditional inference tree model, Decision Trees, to segment the loan attributes and create the Comp for each metric based on the historical performance of the Fannie Mae book of business. To do this, Fannie Mae leverages a publicly available recursive partitioning algorithm to choose the loan characteristics that most significantly differentiate performance for each segment of loans. Please refer to the STAR Performance Scorecard White Paper and Metric Dictionary available on the Fannie Mae STAR Webpage for additional details.

Decision Trees are used to build a comparable pool Comp for each credit performance metric in the STAR Scorecard. The Decision Trees identify the most relevant control variables for each metric which allows the final metric tree to evaluate many variables with fewer buckets and terminal nodes. Please refer to the STAR Performance Scorecard White Paper available on the Fannie Mae STAR Webpage for additional details.

Yes, the Decision Trees are based on the historical performance of the Fannie Mae book of business.

Fannie Mae provides two versions of the scorecard (where applicable) for each servicer at both the Master and Acting level. The Master Servicing view provides performance metrics for all loans where that servicer owns the MSR (Mortgage Servicing Rights), regardless of whether a sub-servicer is employed. The Acting Servicing view provides performance metrics for all loans where the servicer is responsible for servicing activities, regardless of whether they own the MSRs on those loans or are the sub-servicer. For servicers that do not engage in subservicing, these loan populations will be the same.

Mark-to-Market (MTM) Loan to Value (LTV) values are based on the loan’s current principal balance divided by the lesser of the sales price or appraised value at origination marked forward based on Fannie Mae’s Home Price Index.

The Transition to Beyond Timeline metric measures the number of loans that are within 180 days of the state foreclosure time frame that transition to beyond time frame status over a six-month reporting period. Please refer to the STAR Performance Scorecard White Paper available on the Fannie Mae STAR Webpage details.

Collectability status refers to loans that are difficult to resolve, such as loans in a bankruptcy status or loans that are otherwise precluded from normal collections activity. The status is based on loan data reported through Loan Servicing Data Utility (LSDU) and delinquency codes provided via Asset Management Network (AMN).

Loans are excluded from the transferor’s metrics in the month the transfer occurs; however, for Transition to 60+ and 60+ to Cure, loans that transition to 60+ days delinquent or cure before the transfer date are included in the numerator and denominator for the transferor servicer.

Transferred loans are excluded for the transferee for a four-month period following the transfer date for all metrics except six-month Mod Performance, which is not measured.
 

The STAR Operational Assessment is an evaluation of a servicer’s ability to consistently deliver expected results in accordance with established business objectives. Through the assessment process, we evaluate the servicer’s capabilities and competencies to deliver expected results. Additional information can be found in the STAR Reference Guide.

Servicer inclusion is determined annually for all of the STAR operational assessment review categories (General Servicing, Solution Delivery, and Timeline Management), and each servicer will be required to provide documentation for the identified scope of the operational assessment. The amount of documentation required for each Process Area included for a review may be reduced based on prior year results and the performance of metrics tied to the specific Process  Area.

The STAR Final Report is shareable with certain business entities upon signing a disclosure by both parties – Servicer and the entity receiving the report. Please send your request to your Fannie Mae BAMS Team or BAMS Servicing Manager. Upon completion, the BAMS Team will release the STAR Final Report to the servicer.