Servicing Guide

Published June 10, 2020

The Servicing Guide is organized into parts that reflect how lenders generally categorize various aspects of their business relationship with Fannie Mae. To begin browsing, select from any of the sections below. You may also download the entire Servicing Guide in PDF format.

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A1-1-03: Evaluating a Servicer’s Performance (11/25/2015)

This topic contains the following:


Performance Management Framework Overview

In order to determine the servicer’s compliance with its servicing duties under the Lender Contract, Fannie Mae measures the servicer’s performance utilizing various performance metrics, which may include servicer reviews and the STAR™ Program for those servicers (also refers to a subservicer if there is a subservicing arrangement) which Fannie Mae has identified for inclusion in the Program.

Servicers selected to participate in the STAR Program will receive written notification from Fannie Mae prior to being added into the program.

The STAR Program is one of Fannie Mae’s performance management frameworks designed to determine the servicer’s overall performance based on operational assessments and scorecards. The STAR Reference Guide serves as implementation guidance for servicers. The STAR Reference Guide is located on Fannie Mae’s website on the STAR Program page and is incorporated herein by reference. Fannie Mae may change the STAR Reference Guide from time to time.


Servicing Performance Categories

Operational assessments and servicer reviews measure the servicer’s performance based on key criteria in certain servicer performance categories, which may include, but are not limited to the following:

  • customer service;

  • escrow administration;

  • property, flood, and MI;

  • collections;

  • loss mitigation;

  • investor relations/reporting;

  • mortgage loan payment processing;

  • bankruptcy, foreclosure, and REO management;

  • data integrity;

  • delinquency and annual financial and management reporting;

  • document custody and record retention;

  • remitting; and

  • accounting and reporting.

Fannie Mae reserves the right, from time to time, to

  • amend the performance criteria,

  • modify how the results are determined, and

  • revise the content of the performance metrics.

Fannie Mae may also communicate individual performance targets which may not be included in the STAR Program operational assessments and scorecards. Fannie Mae must regularly monitor each servicer’s performance.


Evaluating Performance

Fannie Mae considers many factors when it evaluates whether the servicer’s overall performance is acceptable, including, without limitation, the following:

  • trends in performance,

  • adequacy of staffing,

  • compliance reviews and audits,

  • STAR Program results,

  • mortgage loan file reviews,

  • timeliness of its payment obligations, and

  • overall compliance with the requirements of the Lender Contract.

Unacceptable performance, including unacceptable STAR Program results, may result in a performance improvement plan. Fannie Mae reserves the right to terminate the servicer’s Lender Contract in whole or in part, including its selling and/or servicing arrangement at any time with or without cause, in accordance with the Lender Contract.


Implementing Performance Improvement Plans

Fannie Mae expects all servicers to service all mortgage loans in full compliance with the Lender Contract. The servicer’s performance may be measured by Fannie Mae through any number of servicing quality and compliance reviews, including the STAR Program, servicer reviews, as well as, timely payment of its obligations, compliance with the Servicing Guide, and other key performance metrics.

Servicers with unacceptable performance may be subject to a performance improvement plan issued by Fannie Mae.

Performance improvement plans may require the servicer to take actions and/or meet targets within defined time frames in order to remedy servicing deficiencies, which may include one or more of the following areas:

  • customer service;

  • escrow administration;

  • property, flood, and MI;

  • collections;

  • loss mitigation;

  • investor relations/reporting;

  • mortgage payment processing, remitting, accounting and reporting;

  • bankruptcy, foreclosure and REO management;

  • data integrity;

  • delinquency and annual financial and management reporting; and

  • document custody and record retention.

The failure of the servicer to meet the terms of its performance improvement plan, including any timeline requirements for the performance improvement, constitutes a breach of the Lender Contract and may result in Fannie Mae terminating the servicer’s selling and/or servicing approvals in whole or in part or taking other appropriate actions under its Lender Contract.

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