10 Strategies to Boost Your Chances of Winning a SHARP Award

For Servicers, working with distressed borrowers to offer solutions to help them remain in their homes is inherently rewarding. Still, it’s a privilege to be recognized within the industry for ongoing efforts for loss mitigation. That’s why Freddie Mac created the Servicer Honors and Rewards Program (SHARP)℠.

We’re less than five months away from bestowing our annual awards on deserving Servicers—are you on track to win one?

Discover the MetricsSHARP awards

Eligible Servicers that meet the criteria for receiving an annual rank and fall into groups 1-3 are automatically enrolled in this program. Those who demonstrate superior servicing performance for the prior year can receive rewards and recognition based on the Servicer Success Scorecard. Winners are announced in a press release and receive other industry recognition, a monetary award and a marketing toolkit.

While there’s no additional action required to be considered for this honor, there are steps you can take to improve your servicing performance. Here are 10 ways to help increase your chances of getting recognized next February as a 2024 Freddie Mac SHARP winner:

Default Management Performance Metrics provide insight into your monthly servicing performance for delinquency reporting and workout solutions. While Servicers are ranked on three key weighted metrics, there are twelve total—six core and six supplemental—and all are important in gauging performance. The Modification Pull-Through Rate and 6-Month Modification Performance supplemental metrics, for example, show success in settling and keeping borrowers current with loan modifications. How is your organization doing with the supplemental metrics? Where can you identify areas for improvement that can indirectly impact the scores for the key metrics?

The Transition from 30 to 60+ metric comprises 40% of a Servicer’s overall rank—the highest percentage of any single metric. Proactively communicating with homeowners—even before they need assistance—can help them avoid or advance in delinquency. For current borrowers, use customized communication to provide tailored guidance. For distressed borrowers, look for clues of financial hardship, like ceasing auto draft for monthly payments, and reach out quickly with loss mitigation options and requirements. Get more ideas from our Mortgage Relief Education and Options eBook for Servicers.

The Retention Efficiency metric (20% of score) reflects, as a percentage, the number of Trial Period Plans that were initiated in the current month for loans that were more than 60 days delinquent in the prior month, and a higher value indicates a better performance. Since this metric measures the number of borrowers you were able to set up with a relief solution, be proactive in looking for ways to help homeowners who need assistance with options including loan modifications and payment deferrals.

The Cure Efficiency metric (25% of score) reflects, as a percentage, the number of loans that are 60 or more days delinquent (including loans in foreclosure) in the previous month that started reperforming or paid off in the current month. This includes full reinstatements, closed loan modifications, successful repayment plans, payoffs and repurchases, and a higher value indicates a better performance. While initiating Trial Period Plans gets borrowers on the right track, it’s equally important for them to comply with the terms and make ongoing payments. Reaching out after the Trial Period Plan starts to help gauge their comfort level and current financial situation will ultimately lead to more successful outcomes.

Younger homeowners probably aren’t talking to Servicers on the phone, and they may be tossing out notices sent via snail mail. They more likely prefer email, text or engaging through a web portal to see loan details, input the reason for their delinquency or let their Servicer know their hardship has been resolved. Borrowers across all generations often want to self-serve, but no matter how homeowners prefer to communicate, build out comprehensive channels and strategies that offer choice.

There’s a wealth of valuable data behind the scorecard. Each of the 12 metrics shows details about what loans pulled your ranking up or down. The Executive Summary Report (ESR) provides the numerator and denominator values for each metric and defining precisely what it measures. The Rank Improvement Report gives context about how much you’d need to move the needle to outrank the number one Servicer in your group; it provides specific, practical optics to gauge the effort to move up, for example, from number 10 to number five, or number five to number one. Might that require helping 100 more distressed borrowers? Two hundred more?

The ESR is also a treasure trove of details that can help you identify on what your organization has and hasn’t been focusing, allowing you to pivot if necessary. Since it shows the 12-month history in a chart format, you can analyze how a strategy change you undertook in January has impacted your servicing performance since, in both positive and negative ways.

Use metrics like the Transition from 30 to 60+ to set performance goals and benchmarks for your organization. Maybe only 20 loans set you apart from the number three Servicer: what could your organization have done to stop those borrowers from going 60 days delinquent? Could you have been more proactive in offering payment deferrals or loan modifications? Engaged earlier with the borrower? Take practical steps to extend your efforts and climb in your ranking.

Sure, the Servicer Success Scorecard is the main criteria for determining award winners. But Freddie Mac considers other factors. Does your organization have a strong collaborative relationship with us? Are your business practices transparent and do you proactively disclose challenges and inadequacies so we can help remediate them? If you’re acquiring loans, do you have successful strategies? Are you doing well in areas that the scorecard doesn’t measure, like servicing transfers? Again, Servicers who excel in these adjacent practices may experience a “trickle up” effect that leads to scores in the metrics that do count toward awards.

If you want to improve but you’re not sure how, or you’d like to do a pulse check, reach out to your servicing relationship manager (SRM). They’ll gladly work with you to get you one step closer to snagging an award next year. You can also access the Servicer Success Scorecard Performance Metrics Tutorial or the Servicer Success Scorecard Reference Guide.