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Tier Ranking System (TRS)

HUD implemented the Tier Ranking System (TRS) in 2000 as a pilot to measure servicer's utilization of HUD's loss mitigation program.

Announcement: TRS Round 52 Release and Incentive Payment Information

The Tier Ranking System (TRS) notification letters for Round 52 were released via US mail to the ranked servicing lenders on May 15, 2013.  As a reminder, additional incentive payments for all lenders ranked as Tier 1 for Round 50 began for claims processed on or after January 1, 2013 and goes through December 31, 2013.  All questions regarding related issues should be directed to mailbox sfdatarequests@hud.gov.

Why TRS?

TRS rankings are used by HUD to determine which servicers are utilizing HUD's loss mitigation tools.  Servicers in Tiers 3 and 4 (the lowest rated tiers) are routinely targeted for training by the NSC as well as possible investigation or audit by the Office of Lender Activities.

Additionally, regardless of a servicer's TRS ranking, every active FHA servicer's use of the three loss mitigation retention tools (special forbearance, mortgage modification, and partial claim) is reviewed. HUD determines those servicers that use one initiative exclusively at the expense of the others.  HUD also reviews servicers that use one initiative more than 300% of the national average use or less than one-third of the national average use. Numbers far outside the national average may indicate servicer abuse or lack of training.  Again, those servicers whose ratios of loss mitigation use are far outside the boundaries of normal servicers and who do not have a reason for such usage are targeted for training, investigation, or audit.  TRS Ranking System (TRS) Facts:

 -   Measures a servicer's loss mitigation engagement alone.
 -   Can be calculated by a servicer because the data of other servicers is not required to make the calculation.
 -   Until Round 20, TRS DID NOT determine increased loss mitigation incentives, increased foreclosure reimbursement, or longer PFS time frames.
 -  

Scores are released quarterly and are based on data from a rolling 12 month rating period.

TRS Incentives

The Tier Ranking System (TRS) notification letters for Round 50 were released via US mail announcing the FHA servicing lender's ranking in Tier 1 during Round 50 that are eligible during calendar year 2013 for the following:

 -   An additional $100 payment for each Special Forbearance Agreement executed on or after January 1, 2013.
 -   Pre-foreclosure sale time frames may be extended an additional two months without prior HUD approval; and
 -   For loans endorsed on or after February 1, 1998, lenders will be able to claim reimbursement of 75 percent for foreclosure costs (an increase from the current allowance of 66 percent) on Part B claims received by HUD on or after January 1, 2013. For loans endorsed prior to February 1, 1998, all lenders will continue to be reimbursed two thirds of the foreclosure costs.

TRS Work Out (WO) Ratio

The work out ratio is loss mitigation divided by loss mitigation plus foreclosures. The actual formula is:

Forbearances + LM Retention Claims + PFSs + DILs + ACDs

Forbearances + LM Retention Claims + PFSs + DILs + ACDs + Foreclosures

*ACD refers to HUD's 601 Accelerated Claims Disposition Program.


Where HUD gets the data

HUD collects information on formal forbearances (FFs) through HUD's Single Family Default Monitoring System (SFDMS). Servicers who initiate forbearances and report codes 09 (special forbearance) - but do not file an incentive claim as when used in a combination with a mortgage modification or partial claim - 12 (repayment), 08 (trial repayment plan), 39 (trial repayment plan HAMP), and 32 (military indulgence) during a rating period are given credit for that forbearance. For TRS, HUD uses the default cycle date that indicates the first time the servicer reported the FF in an episode as the date of record.

HUD collects information on loss mitigation home retention options through the paid claims that servicers file. The loss mitigation home retention options are: special forbearance (SF), mortgage modification (MM), and partial claim (PC). For credit in TRS, HUD uses the date the claim was processed as the date of record.

HUD collects information on terminations (PFSs, DILs, ACDs, and FCs) through paid conveyance claims that servicers file. For TRS, HUD uses the FHA insurance date claim was processed as the record date. TRS Scoring Criteria

 -   A maximum of one loss mitigation event (forbearance, special forbearance, mortgage modification, partial claim, preforeclosure sale, deed-in-lieu, or accelerated claims disposition) is counted for each loan per ranking period.
 -   All foreclosures are counted.
 -   Servicers with less than 11 foreclosures and a ratio that puts them into Tiers 3 or 4 are not ranked. However, servicers with less than 11 foreclosures and ratio that puts them into Tiers 1 or 2 are ranked in their respective Tier.
 -   Tier 1 is the highest ranking (indicating best servicing performance insofar as the application of HUD's loss mitigation is concerned)
 -   Tier 4 is the lowest ranking (indicating worst servicing performance insofar as the application of HUD's loss mitigation is concerned)

WO Ratio determines Tier Ranking

A tier ranking is assigned to servicers based on their Work Out (WO) Ratio. The current tier benchmarks are:

Tier
Work Out (WO) Ratio
1
Greater than 0.79999
2
0.60 to 0.79999
3
0.40 to 0.59999
4
Less than 0.40
Publication of TRS Scores

Servicers are notified of their score by individual letter.

TRS Round Servicer Ranking
TRS Round 43
TRS Round 46 - Unavailable
   

The following table shows the period reviewed and the dates those scores were released, beginning with TRS Round 20.

TRS Round
Ranking Period
Scores Released
Beginning
Ending
20
04/01/2004
03/31/2005
10/07/2005
21
07/01/2004
06/30/2005
02/03/2006
22
10/01/2004
09/30/2005
02/17/2006
23
01/01/2005
12/31/2005
04/15/2006
24
04/01/2005
03/31/2006
06/10/2006
25
07/01/2005
06/30/2006
08/15/2006
26
10/01/2005
09/30/2006
12/22/2006
27
01/01/2006
12/31/2006
04/02/2007
28
04/01/2006
03/31/2007
06/01/2007
29
07/01/2006
06/30/2007
08/15/2007
30
10/01/2006
09/30/2007
12/15/2007
31
01/01/2007
12/31/2007
02/15/2008
32
04/01/2007
03/31/2008
05/15/2008
33
07/01/2007
06/30/2008
08/15/2008
34
10/01/2007
09/30/2008
12/15/2008
35
01/01/2008
12/31/2008
02/13/2009
36
04/01/2008
03/31/2009
05/15/2009
37
07/01/2008
06/30/2009
08/15/2009
38
10/01/2008
09/30/2009
12/15/2009
39
01/01/2009
12/31/2009
03/10/2010
40
04/01/2009
03/31/2010
05/20/2010
41
07/01/2009
06/30/2010
08/13/2010
42
10/01/2009
09/30/2010
12/15/2010
43
01/01/2010
12/31/2010
04/15/2011
44
04/01/2010
3/31/2010
05/15/2011
45
07/01/2010
06/30/2011
08/15/2011
46
10/01/2010
09/30/2011
12/15/2011
47
01/01/2011
12/31/2011
03/15/2012
48
04/01/2011
03/31/2012
05/31/2012
49
07/01/2011
06/30/2012
08/15/2012
50
10/01/2011
09/30/2012
12/15/2012
51
01/01/2012
12/31/2012
05/15/2013
52
04/01/2012
03/31/2013
05/15/2013

The following table provides a breakdown of servicers in each tier.

 
TRS Round
Number of Ranked Servicers in Each Tier
Percent of Ranked Servicers in Each Tier
Tier 1
Tier 2
Tier 3
Tier 4
Total Ranked
Tier 1
Tier 2
Tier 3
Tier 4
Total Ranked
20
92
72
25
13
202
45.5%
35.6%
12.4%
6.4%
100%
21
88
68
22
7
185
47.6%
36.7%
11.9%
3.8%
100%
22
89
66
17
7
179
49.7%
36.9%
9.5%
3.9%
100%
23
95
60
20
3
178
53.8%
33.7%
11.2%
1.7%
100%
24
92
61
16
5
174
52.9%
35.0%
9.2%
2.9%
100%
25
106
57
13
4
180
58.9%
31.7%
7.2%
2.2%
100%
26
110
57
12
4
183
60.1%
31.2%
6.5%
2.2%
100%
27
110
54
8
4
176
62.5%
30.7%
4.5%
2.3%
100%
28
116
48
11
4
179
64.8%
26.8%
6.2%
2.2%
100%
29
101
49
14
1
165
61.2%
29.7%
8.5%
0.6%
100%
30
99
43
9
5
156
63.5%
27.5%
5.8%
3.2%
100%
31
89
39
11
5
144
61.8%
27.1%
7.6%
3.5%
100%
32
91
46
8
3
148
61.5%
31.1%
5.4%
2.0%
100%
33
93
41
12
2
148
62.8%
27.7%
8.1%
1.4%
100%
34
97
40
7
2
146
66.4%
27.4%
4.8%
1.4%
100%
35
111
36
9
1
157
70.7%
22.9%
5.7%
0.7%
100%
36
122
33
6
2
163
74.9%
20.2%
3.7%
1.2%
100%
37
114
38
8
1
161
70.8%
23.6%
4.9%
0.7%
100%
38
117
41
7
1
166
70.5%
24.7%
4.2%
0.6%
100%
39
117
44
8
1
170
68.8%
25.9%
4.7%
0.6%
100%
40
118
48
6
1
174
67.8%
27.6%
3.5%
1.1%
100%
41
119
49
7
3
178
66.9%
27.5%
3.9%
1.7%
100%
42
121
53
9
5
188
64.4%
28.2%
4.8%
2.6%
100%
43
112
64 
11 
6
193 
58.03% 
33.16%
5.70% 
3.11% 
100% 
44
108
66 
5
187 
57.76% 
35.29%
4.28% 
2.67% 
100% 
45
108
66 
8
6
188 
57.45%
35.11%
4.26% 
3.19%
100% 
46  105 65 16  6
189
55.56%  34.39% 6.88% 3.17% 100%
47  101 66  16  5
188
53.72%  35.11%  8.51% 2.66% 100% 
48  117 47 21  6 191 61.26%  24.61%  10.99% 3.14% 100%
49 115 59 17  3
194
59.3%  30.4%  8.8% 1.5% 100%
50 114 71 15  2  202 56.4%  35.1%  7.4% 1.0% 100%
51 124 64 16 1 205 60.5% 31.2% 7.8% 0.5% 100%
52 119 70 15 0 204 58.3% 34.3% 7.4% 0.5% 100%

 Comments and Questions

Content current as of June 1, 2013