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66 and transitioning to a revitalized mortgage industry, where they will be expected to resume mortgage payments and pay past-due interest under a new set of mortgage terms. Another bottleneck will emerge. Soon, the mortgage servicing industry will be challenged to re-underwrite over 2 million loans, with virtually no surplus underwriting manpower to accomplish this volume. As with the 2020 crisis, underwriting volume will far exceed capacity. ere is simply no way the servicing industry has the underwriting manpower to cope with this huge influx of new underwrites. at's more than 2 million of them. at is a staggering number of underwrites. Another consideration on top of these staggering statistics is that the CFPB is now monitoring the quality of servicing being offered to these homeowners. To use the 2020 productivity statistic, this new volume will consume 791,000 person- days of underwriter processing time that will translate into 3,958 man-years of underwriting time and talent that simply does not exist in the servicing sector. Attempts to transition underwriters currently being laid off in the origination space to the servicing sector will be slow and inefficient and unable to transition quickly enough to ease the pain. Added to this stress will be the stress of adopting and executing a new set of underwriting guidelines, many of which have yet to be written. e secondary market will have to create new underwriting guidelines to guide servicers and borrowers through the many complexities of this new process. ere will also be additional challenges. THE GREAT SURPRISE Not only must servicers process a re-underwrite with exceptional efficiency (one not likely to be possible), but they are likely to be engaging a borrower who is under substantial distress. ere is a shock awaiting the borrowers who are exiting the safety of the COVID-19 forbearance environment where all payments were suspended (but not forgiven). ey will be entering the new mortgage industry, where borrowers who have been in forbearance will not only be expected to resume mortgage payments but to repay thousands in delayed interest payments that were forborne but not forgiven. is will be the Great Surprise. is Great Surprise has not been anticipated by the average borrower, who will be shocked and may feel misled and manipulated. It is expected that such borrowers thought that they could simply resume their mortgage payments once COVID-19 had expired, unaware that they owed thousands in delayed interest payments. Only the most financially astute have anticipated this reality. e financially astute players (who are in the distinct minority) understand the workings of the secondary market where mortgage interest is demanded and owed regardless of circumstance. e COVID-19 forbearance plan simply did not relieve mortgage servicers and/ or borrowers of their obligation to service mortgage interest during forbearance. is fact will cause the mortgage servicers to be re-engaging borrowers who will be surprised and feel misled by the request (demand) to pay past-due interest when resuming servicing their mortgage. e net result may be 2.0+ million borrowers who emerge angry and frustrated by the mortgage industry directly and feel misled and manipulated by their government. Adding to this problem is the insult these borrowers will suffer by having to wait weeks, if not months, for their "new" mortgage loan to be underwritten. Of course, the CFPB may emerge to add fuel to the fire, requiring servicers to move on with the 2.0 million underwrites at a speed not possible under current business models, which are highly manual in nature. e situation in 2022 is ripe for new technology to provide the underwriting productivity and quality boost the industry needs. at new technology must perform many dimensions of the underwrite automatically, performing the critical thinking underwriters must accomplish to underwrite a loan successfully and create a saleable loan with virtually no scratch-and-dent and/or repurchase risk. MORE TO COME e lack of appropriate investor guidelines is an issue as well. is is an issue because each investor (i.e., each mortgage bond holder) will have to prescribe how the thousands of dollars in delayed but not forgiven interest expense per loan will be amortized in the re-underwritten loan. Whether the investor chooses to delay that repayment as an increase in monthly payments or as an increase in the unpaid principal balance has not, to my knowledge, been determined. One more point, and it is a huge caveat: when human intel is relied upon to decide the fate of the "murky" loan, this is where bias and loan defects are introduced as humans attempt to make the data fit the desired outcome. omas Showalter is the Founder and CEO of Candor. He has held a variety of key executive experiences holding positions as CEO, C-level executive, SVP, and VP across a variety of nationally known firms: Digital Risk, CoreLogic, First American, Loan Performance, Experian, and several boutique data and analytics firms. His background also included a stint at NASA, where he developed a variety of aerospace technologies for use in civilian and military aircraft, as well Feature By: Thomas Showalter