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82 As work has slowed, the industry has consolidated, with some leaving the business entirely, Hladik says. "It's a challenge to retain intellectual capital." "Unlike the Great Recession of 2008- 2010, the current crisis isn't the fault of anyone. e consumer didn't do anything to cause this," said Caren Castle, Senior Attorney with e Wolf Firm. So the focus of government action and the default servicing industry has been to help consumers save their homes. "You've seen sympathetic courts," Castle added. "Some of these people have never missed a payment before." ough unemployment figures improved in the second half of 2020, Castle pointed out that many–including many in the default servicing industry–were still underemployed, not having the volume of work, commissions, hours, overtime, etc., that they once had. ere will be a continuing strain on consumers and the default servicing industry, Castle says. Even when the COVID-19 vaccines start making their way into the general public sometime in the late winter/ early spring, it will be some time before the unemployed and underemployed return to their previous work status. "ere's no appetite to throw everyone out on the street," Castle said. According to Castle, local, state, and federal officials will be looking for various solutions, some of them borne out of the 2008-10 recession. "We have many more tools now. We focus on customer service rather than collections. ere are so many variables. ere will be a massive amount of loan modifications." Chad Neel, Chief Executive Business Officer with McCarthy Holthus LLP, pointed out that the forbearance agreements that put missed payments at the end of mortgages, loan modification offers, and other programs are new or more well-defined since the Great Recession. ey will help debtors and servicers alike work through resolutions. ere will undoubtedly be foreclosures as well, Castle and others added. But prices for single-family homes have increased throughout the last year, so many homeowners of single-family properties will benefit from an increase in equity that will enable them to sell their homes, satisfy debts and move into a more affordable home. In addition to modifications and foreclosures, Castle said she expects a significant increase in bankruptcies, with some default servicing firms shifting much of their business from collection to bankruptcy work. Many firms handle both foreclosure and bankruptcy work, so as the type of work shifts, they will shift resources accordingly, Diaz and others say. TRUE LENDER DOCTRINE ough COVID-19-related moratoria, rules, and regulations dominated the default servicing legal landscape in 2020 and will continue to well into 2021, there were other legal developments as well. In July, the Comptroller's office proposed a rule designed to address the true lender doctrine, intended to determine the true lender in a credit transaction–a bank or a nonbank partner. Some nonbank partners market loans, identify borrowers, collect applications, and handle other loan-related issues while the bank underwrites the loan. e proposed rule says that the national bank is the lender if it is named in the loan agreement or funds it. Under the proposed rule, the "true lender" determination doesn't change if the bank transfers the loan. Neel added that there are numerous state laws proposed to delay foreclosures, with resolutions the preferred outcome. Another pending state law that could have some impact, according to Neel, is California SB 1079, which would, until January 1, 2026, would require the notice of sale to contain a specified notice to a tenant regarding the tenant's potential right to purchase a property containing from one to four single-family residences pursuant to a process the bill would prescribe. In connection with these properties, the bill would require a trustee to maintain an internet website and a telephone number to provide specified information on the properties free of charge and available 24 hours a day, seven days a week. Existing law, concerning the exercise of a power of sale under a mortgage or deed of trust, requires the sale to be held in the county where the property or some part of it is situated and to be made at auction, to the highest bidder, as specified. Existing law generally requires that if the property consists of several lots or parcels, they are to be sold separately unless the deed of trust or mortgage provides otherwise. Until January 1, 2026, this bill would prohibit a trustee from bundling properties for sale instead of requiring each property to be bid on separately unless the deed of trust or mortgage provides otherwise. According to Neel, this provision would help prevent large property owners from coming in at the last minute to buy several properties at once. Other state legislation impacting the default servicing industry in California and elsewhere could emerge later in 2021, but most legislation at the state and federal levels will likely build off the pandemic-related rules adopted last year. ey will depend mainly on the progress in fighting the virus and any rebound in the economy and employment. Phil Britt started covering mortgages and other financial services matters for a suburban Chicago newspaper in the mid-1980s before joining Savings Institutions magazine in 1992. When the publication moved its offices to Washington, D.C., in 1993, he started his own editorial services room and continued to cover mortgages, other financial services subjects, and technology for various websites and publications. Cover Story