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64 extension of the foreclosure moratorium until September 30, and some expect forbearance extensions to ultimately span a 24-month period in total. e foremost driver of the policy roadmap is, unsurprisingly, the enduring need for economic relief as the pace of vaccination distribution pushes the return to normalcy to mid to late 2021. Other policy drivers to keep in mind: » Slowly improving unemployment rate (6.3% unemployment rate in January, down from 6.7% in December) » High likelihood of imminent stimulus in wake of slight Democratic majority in Senate » K-shaped recovery impacting sectors of market differently » Tax reform on table, influenced by Senate moderates A SHIFTING REGULATORY CLIMATE On the regulatory front, the Biden administration's philosophy is that "personnel is policy," and Biden's early appointees at the CFPB/HUD/OCC will be key to guiding their policy agendas. A Democratic majority in the Senate emboldened the new administration to pursue more aggressive nominations, including the Warren-approved Rohit Chopra as CFPB Director. However, with such a narrow majority margin, the Biden administration will have to cater to a more moderate agenda if the goal is to pass meaningful legislation through Congress. Lenders have been bracing for a more rigorous era of CFPB enforcement, and that may indeed be on the horizon. e CFPB is in the midst of a hiring spree, and a Chopra- headed CFPB is anticipated to ramp up requests for funding and show a strengthened capacity for fair lending enforcement, process development for initiating investigations, and collaboration with state mini-CFPBs. On February 23, the CFPB announced that it expects to propose a rule to delay the compliance date for the new Qualified Mortgage (QM) rule to July 1, 2021, to allow lenders more time to make QM loans based on their DTI ratio or Fannie/Freddie eligibility. e CFPB has also dropped hints that they may revisit the Seasoned QM Final Rule and, at a later date, consider whether to begin further rulemaking to reconsider other elements of the General QM Rule. Other regulatory influences to keep in mind: » FDCPA rule finalized in November » Reg X/loss mitigation rule updates expected in Spring » HUD expected to focus on affordable housing initiatives and enforcement activity around CARES Act forbearance and servicing » OCC/Fed/FDIC emphasis on the Community Reinvestment Act FORBEARANCE VOLUME STAYS STEADY AS SERVICERS PREP FOR LOSS MIT WAVE On the forbearance front, MBA forbearance volume data through February 14 shows reason for cautious optimism; forbearance volume is slowly trending Feature By: Matthew Tully As forbearance, volume remains steady, servicers need to shore up their loss mitigation waterfall to prepare for the wave when tides turn and forbearances finally expire for good. FIGURE 1

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