Investor Reporting Change Initiative - Freddie Mac · This document outlines our approach and...

Updated: November 2017

Investor Reporting Change Initiative

Customer Testing Strategy



Customer Testing Strategy Customer Integration Testing Strategy



Freddie Mac © 2017 2

Background

As part of the Investor Reporting Change Initiative (IRCI), Freddie Mac is making updates to investor reporting systems and processes that will change how Servicers and vendors report loan data to Freddie Mac.

Freddie Mac will make available a Customer Test Environment (CTE), to allow Servicers and vendors to test the investor reporting changes prior to implementation.

Document Purpose

This document outlines our approach and provides details on the customer testing activities.

Table of Contents Page #

Participation 3

Systems & Functionality 4

Overview 5

Test Planning & Preparation Activities 6

Testing Approach 7-8

Entry & Exit Criteria 9

CIT Timeline 10

Communication & Execution Process 11

Defect Management Process 12

Contact & Definitions 13


BackgroundAs part of the Investor Reporting Change Initiative (IRCI), Freddie Mac is making updates to investor reporting systems and processes that will change how Servicers and vendors report loan data to Freddie Mac.

Freddie Mac will create an environment to allow Servicers and vendors to test the investor reporting changes prior to implementation.

Document Purpose


Table of Contents

Participation .......................................................................................................................................................... 3

Systems & Functionality ........................................................................................................................................ 4

Overview ............................................................................................................................................................... 5

Test Planning & Preparation Activities .................................................................................................................. 6

Testing Approach .................................................................................................................................................. 7-8

Entry & Exit Criteria ............................................................................................................................................... 9

Customer Integration Testing (CIT) Timeline ......................................................................................................... 10

How It Works — Communication & Execution Process ....................................................................................... 11

How It Works — Defect Management Process .................................................................................................... 12

Contact & Definitions ............................................................................................................................................ 13


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Participation Freddie Mac Customer Integration Testing (CIT) will be available to all Servicers and their vendors. All Servicers are strongly encouraged to conduct testing with Freddie Mac.

At a minimum, Servicers must ensure their vendors participate in testing with Freddie Mac and comply with the following requirements:

By participating, you’ll be able to...

Validate your systems are ready for investor reporting changes.

Confirm your systems and processes will work during the cutover transition prior to production.

Have an opportunity to test your business processes for IRCI changes.

Servicers who use vendors or Sub-Servicers

Review the Freddie Mac recommended CIT scenarios that apply to the Servicer’s portfolio and their vendor/Sub-Servicer’s plan for testing those scenarios.

Determine whether the Servicer or its vendor/Sub-Servicer should develop and test additional CIT scenarios.

Ensure the selected Servicer’s portfolio is reflected in the vendor’s testing plan.

Review testing outcomes with its vendor, including mitigation plans for resolving the defects.

Servicers who report through:Proprietary systemsFreddie Mac Service Loans application

Review the Freddie Mac recommended CIT scenarios that apply to the Servicer’s portfolio and develop a plan for testing those scenarios with Freddie Mac.

Determine whether the Servicer should develop and test addi-tional CIT scenarios.

Review testing outcomes, develop and test mitigation plans for resolving defects.


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Systems & Functionality CIT is focused on Freddie Mac’s Servicer-facing applications and corresponding functionality. The following are in scope for CIT:

Business Function Transmission Methods

Investor Reporting Loan Level Reporting using Service Loans application (SLA) & Business-to-Business (B2B)

Delinquency Reporting Electronic Default Reporting (EDR) using SLA & B2B

Workout Settlement Workout Prospector (WP2)

Foreclosure Sale Reporting Foreclosure Sale/Deed in Lieu Reporting using SLA


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Registration Communication Data Management Testing Artifacts

All Servicers and vendors will be invited to participate in testing.

Servicers and vendors who wish to test will complete a test registration form.

Test credentials to access the test environment will be sent to Servicers and vendors who complete registra-tion.

Freddie Mac Testing support team will be the central communication point for all testing activities, questions and defects.

Servicers and vendors will also continue to have the assistance of the designated Freddie Mac IRCI Vendor Integration project manager to assist with testing activities.

Freddie Mac and Servicers and/or vendors will use the same starting data point prior to test execution.

Each Servicer/vendor may submit loan numbers to Freddie Mac for testing up to 10% of the Servicer’s portfolio volume. For Servicers who register to test but do not provide Freddie Mac loan numbers, Freddie Mac will select 10% of their portfolio that fits the minimum test scenarios.

It is recommended that Servicers pick a wide range of products, terms and delinquency statuses for testing.

Testing documentation and artifacts will be stored by Servicers/vendors in the Freddie Mac Test Document Repository (TDR).

Servicers/vendors will upload test scenarios to TDR prior to CIT.

Servicers/vendors will update and maintain results of test execution in the TDR.

TDR will be used for defect tracking.

Credentials to access TDR will be sent to Servicers and vendors who plan to test.


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Activity Description

Test Preparation Plan Freddie Mac will support Servicers/vendors to develop a test preparation plan that outlines the test data, testing resources, assumptions, constraints, dependencies and other testing information.

Test Scenarios

Review and create test scenarios:

• Freddie Mac has provided the recommended minimum CIT scenarios for IRCI changes.

• Servicers, in conjunction with their vendor/Sub-Servicer, will identify any additional CIT scenarios to be included based on their portfolio.

• If requested, Freddie Mac will review the additional CIT scenarios that Servicers create.

Test Registration

• All Servicers are invited to participate in testing. A test registration form will be made available to all Servicers and vendors.

• Servicers and vendors who wish to test will complete and return the test registration form to confirm participation.

• Servicers and vendors are required to provide contact information for their testing Points of Contact (POCs) and escalation POCs.

Test Data Preparation

Servicers/vendors will identify Seller/Servicer numbers and corresponding loan numbers to be included in CIT.

• Servicers/vendors will provide their final list of Freddie Mac loan numbers (up to 10% of the Servicer’s portfolio) for the selected CIT scenarios. It is recommended that Servicers pick a wide range of products, terms and delinquency statuses to meet the testing scenarios.

• For Servicers who register to test but do not provide loan numbers, Freddie Mac will select 10% of the Servicer’s portfolio that fits the recommended test scenarios.

• Freddie Mac and Servicers will use the same starting data point (ending UPB and corresponding data) for test execution.

Test Execution Freddie Mac testing will occur from August 2018 to March 2019. Please view “Testing Approach” section for additional details.

Test Planning & Preparation Activities Freddie Mac will coordinate the following test planning and preparation activities with Servicers and vendors:


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Testing ApproachFreddie Mac CIT will occur in three waves

CIT Wave 1

*Cutover Testing: Testing of the transition month in which Freddie Mac and Servicers/vendors transition from the current, pre-IRCI monthly accounting and reporting cycle to daily reporting using a monthly accounting cycle.

**Functional Testing: Refers to testing the non-Cutover changes associated with the IRCI program.

Participation Freddie Mac will be performing testing with Black Knight and Fiserv (LoanServ)

Scope

Cutover Testing* and Functional Testing**

Data

Black Knight and Fiserv (LoanServ) to use July 2018 ending balance (investor balance) and corresponding loan data from production to begin CIT in August 2018 with Freddie Mac

AUGUST 2018 CIT Cycle 1 (CUTOVER Testing)

August Accounting Cycle

SEPTEMBER 2018 CIT Cycle 2 (Functional Testing) September Accounting Cycle


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





CIT Wave 2

CIT Wave 3

Data

Servicers/vendors to use December 2018 ending balance (investor balance) and corresponding loan data from production to begin Cutover testing in January 2019 with Freddie Mac NOTE: Data will be refreshed for all participants, including the participants from Wave 1 & Wave 2.

Scope

Cutover Testing and Functional Testing

Participation

This wave is open to all Servicers and vendors

Participation

This wave is open to all Servicers and vendors

Scope

Three consecutive cycles of Functional Testing (Cutover will not be tested in this wave)

Data

Servicers/vendors to use September 2018 ending balance (investor balance) and corresponding loan data from production to begin CIT in October 2018 with Freddie Mac NOTE: Testing for participants from Wave 1 will be uninterrupted and data will not be refreshed.

JANUARY 2019 CIT Cycle 1 (CUTOVER Testing)

January Accounting Cycle

FEBRUARY 2019 CIT Cycle 2 (Functional Testing)

February Accounting Cycle

MARCH 2019 CIT Cycle 3 (Functional Testing)

March Accounting Cycle

OCTOBER 2018 CIT Cycle 1 (Functional Testing)

October Accounting Cycle

NOVEMBER 2018 CIT Cycle 2 (Functional Testing)

November Accounting Cycle

DECEMBER 2018 CIT Cycle 3 (Functional Testing)

December Accounting Cycle


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Test Registration and Resources (Jan-Feb 2018)

1 Servicers and vendors complete the test registration form to obtain access to test environment and the TDR.

2 Servicers and vendors to provide any testing-related assump-tions, constraints and dependencies to Freddie Mac.

3 Servicers and vendors provide Freddie Mac with the names and contact information of testers.

Test Environment (Mar-May 2018)

4 Servicers and vendors validate their connectivity to the Freddie Mac customer test environment.

5 Servicers and vendors validate access credentials in the customer test environment.

6 Servicers’/vendors’ environment is ready for testing with Freddie Mac.

Testing Support Training (Begins June 2018)

7 Servicers/vendors participate in the testing support training for an overview of the testing process and communication procedures.

Test Data (15th June 2018)

8 Servicers/vendors provide final list of loan numbers for the CIT scenarios within each identified Seller/Servicer number.

9 Freddie Mac defines the starting data point prior to test execution. Servicers/vendors sync up production data reported to Freddie Mac the month prior to test execution to ensure the ending UPBs and corresponding data match in the test environment.

Test Scenarios (June 2018)

10 Servicers/vendors review the Freddie Mac recommended minimum CIT scenarios, published in November 2017.

11 Servicers/vendors identify the Freddie Mac recommended CIT scenarios that apply to the Servicer’s portfolio and create additional CIT scenarios if needed. Servicers update scenarios to TDR by June 2018.

1 Servicers/vendors successfully execute all planned CIT scenarios.

2 Servicers/vendors have remediated or defined and reviewed a satisfactory mitigation plan with Freddie Mac.

3 Servicers/vendors have documented all scenarios and results in the TDR.

Entry & Exit ChecklistEntry Checklist

Exit Checklist


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





CIT TimelineTimeline below provides key CIT milestones

Feb 18 Mar 18 Apr 18 May 18 Jun 18 Jul 18 Aug 18 Sep 18 Oct 18 Nov 18 Dec 18 Jan 19 Feb 19 Mar 19 Apr 19 May 19

Jan - MarTest Registration

Mar - MayConnectivity Testing

Aug - MarCustomer Integration Testing

Jan 01, 2018 May 31, 2019

AprSLA/WP2 Credentials

Provided by FRE

JunServicers/vendors to Provide 10%

Test Loan Population to FRE

JunBegin Testing

Support Training

MayGo Live

Aug - SepWave 1

Oct - DecWave 2

Jan - MarWave 3


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





How it Works - Communication & Execution Process

Go to Start

End

CIT Freddie Mac Defect Mgmt

Process

Serv

icer

s/ve

ndor

s Fr

eddi

e M

ac

1.1Execute Test

Scenario(Report Transaction

in Customer Test Environment)

1.2Process

Transaction

1.5 Update Completion of Test Scenario in

Test Document Repository

(TDR)

1.6 Provide Defect

Resolution Status Updates

in TDR Until Issue Resolved

1.7 Re-execute

Failed Scenario

1.4Reivew

TransactionResults

1.3Generate

Transaction Results

E.g. B2B Response File, SLA

Reports etc.

Start

Yes

Yes

No

Results as Expected?

No

Is it a Servicer/ Vendor Defect?


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





How it Works - Defect Management Process

Yes

No

CIT Comm & Execution

Process

CIT Comm & Execution

Process 1.6

End

End

Serv

icer

s/ve

ndor

s Fr

eddi

e M

ac

2.1 Notify Freddie Mac of Defect

2.9Re-execute

Failed Scenario

2.8Provide Defect

Resolution Status Updates

until Issue Resolved

2.7Perform Defect

Resolution

2.11Close the

Defect

2.10Update

Completion of Test Scenario in Test Document

Repository

2.5 Provide Defect

Tracking Number to Servicer

2.4Log the Defect

2.2Validate Defect

2.3 Work with the

Servicer for Resolution

2.6Send

Notification to all Testing

Servicers

Freddie Mac

Defect?

Yes

NoGlobal

Defect?

Yes

No

Defect Re-test

Successful?


Background



Document Purpose



Participation 3


Overview 5




CIT Timeline 10





Contact our IRCI test team at: Freddie Mac Customer & Vendor Integration

Contact & Definitions

Definitions

Customer Integration Testing (CIT): Testing conducted between and Servicers/vendors and Freddie Mac Servicers/vendors: Servicers and/or their vendors who provide technology and/or reporting services Testing Support Team: Freddie Mac contacts to support Servicers/vendors during CIT

Test Data: Loan numbers used to test CIT test scenarios Test Document Repository (TDR): Central repository updated by Servicer/vendor for all Servicer testing artifacts – accessible by Servicers/vendors and Freddie Mac

Test Scenario: A written outline of a business functionality or process that can be tested

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