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Fannie Mae said it will give servicers more financial incentives to help borrowers avoid foreclosure.
February 23
Top banks including Bank of America Corp. and JPMorgan Chase & Co. flunked Fannie Mae's latest test of mortgage servicers — but Fannie won't exactly say that.
The government-sponsored enterprise on Wednesday praised mortgage servicers that are making progress in helping homeowners avoid foreclosure, according to a new ranking system Fannie created in February.
Only four of the 11 largest servicers in the U.S. are on track to receive an "at least median performance" for the first half of the year, Fannie said Wednesday. Those companies are Citigroup Inc., Wells Fargo & Co., Ally Financial Inc. and Everhome Mortgage.
But Fannie refused to identify the underperforming servicers by name. Instead, a spokesman provided a list of "peer groups" listing the servicers it assessed in each category.
Fannie puts Citigroup and the other successful servicers in a category along with B of A, JPMorgan Chase, and five others that also did not make the grade: MetLife Inc., OneWest Financial Inc., PNC Financial Services Group Inc., Sovereign Bank and SunTrust Banks Inc.
A Fannie spokesman said the government-sponsored enterprise was only releasing the names of those servicers that met its minimum requirements.
"We're trying to provide an incentive," to meet the standards, said spokesman Andrew Wilson. "We want to recognize those who are leading the way in working with homeowners to prevent foreclosure."
Leslie Peeler, Fannie's vice president for servicer portfolio management, said in a press release Wednesday that the rankings help Fannie "evaluate and hold servicers accountable for measurable, consistent results in preventing foreclosure."
Peeler, a former trader at GMAC Inc.'s Residential Capital LLC mortgage unit, has not said how servicers would be "held accountable." Wilson said she was not available for an interview.
In a second peer group of slightly smaller servicers, several banks met at least the minimum standards, including Fifth Third Bancorp, Huntington Bancshares Inc., HSBC Holdings PLC and Regions Financial Corp.
