Servicer ratings for first half of 2011

Fannie Mae recently announced the results of its Servicer total Achievement and Rewards Program for the first half of 2011, which measures how well servicers helped borrowers avoid foreclosure. The program was created to encourage lenders to improve customer service and foreclosure prevention efforts through a ratings system. Through the initiative, Fannie Mae hopes to increase its focus on aiding homeowners by evaluating lenders' practices and efforts.

Based on a five-star scale, servicers who received three stars or more achieved an overall satisfactory rating on operational assessments. Servicers placed into three categories based on the number of loans from Fannie Mae they service, and each lender was scored within their peer group.

Peer group one, which included GMAC Mortgage, CitiMortgage, Everhome Mortgage and Wells Fargo Bank, are on track to receive at least a 3 STAR rating for 2011. In comparison, those in peer group two, which include Fifth Third Bank, the Huntington National Bank, HSBC Mortgage Corporation, Aurora Financial Group, Regions Bank and Central Mortgage Company, are set to earn a high rating as well.

While Fannie Mae is evaluating lenders on their practices, Anthony Sanders, professor of real estate finance at George Mason University, told CNBC that the housing market might have a better chance at recovery if the government did not interfere. Sanders does not believe current initiatives from the government to help homeowners is making any significant stimulative effect on the economy.

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