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66 continuity of contact, which attempts to ensure that servicers have dedicated personnel that are knowledgeable and able to assist delinquent borrowers; and (3) loss mitigation, which establishes a procedural framework for working with borrowers to find alternatives to foreclosure, as well as dual-tracking restrictions to ensure foreclosure and loss mitigation are not moving forward simultaneously. In 2016, the CFPB released a substantial set of amendments to the original servicing rules, and a fair number of the changes were in the loss mitigation area. Since that time, the only movement has related to COVID-19. In June of 2020, the CFPB recognized the need to relax the existing loss mitigation restrictions to facilitate servicers' ability to quickly and efficiently offer a deferral option to COVID- 19-impacted borrowers. Finally, in July 2021, the CFPB released a COVID-19 final rule that related exclusively to default servicing requirements in Regulation X. Among other things, the 2021 final rule imposed more prescriptive content requirements for many live contacts that are established with delinquent borrowers to ensure COVID-19 options are discussed, it further loosened the loss mitigation restrictions to allow servicers to offer some streamlined loan modification options to borrowers that may have been impacted by COVID-19, and it instituted a strict prohibition on the filing of new foreclosure actions for the last few months of 2021, with only very limited exceptions. WHERE WE'RE GOING As we consider what the future of mortgage servicing should look like, we ought to acknowledge that, while there are many items that we might want to include on a theoretical wish list to improve servicers' day-to-day lives, the practical reality is that any change in policy or in the regulatory environment must benefit consumers in a clearly articulable way. To have any meaningful chance of convincing the appropriate parties to make the recommended change, a proposal must not provide the industry with all the benefits, even if it is neutral for consumers; there must be some wins on the consumer side of the ledger. With that in mind, one of the most obvious lessons that many learned from the pandemic was that streamlined loss mitigation options are a good thing and can be utilized to benefit servicers and borrowers alike. In early 2020, we saw that the CARES Act established a quick and efficient process for COVID-19- impacted borrowers to get immediate relief on their mortgage payments. e law created an extremely low bar for borrowers of federally backed mortgage loans to obtain up to 360 days of forbearance on their payments. Rather than having to submit mountains of documentation to demonstrate a possible hardship or evidence the borrower's financial position, Congress mandated that servicers offer forbearance whenever it was requested provided that the borrower also attested to experiencing a COVID-19-related hardship. is could happen verbally, in writing, or even through a web portal or other online interface, making it extremely easy for borrowers to enter a forbearance program. Likewise, it also eliminated the need for servicers to expend the time and resources to work through a prolonged document chase process where they constantly try to obtain missing documentation that is needed to complete an application and for their review. Shortly thereafter, the CFPB released its interim final rule to remove existing barriers in Regulation X that could have prevented servicers from quickly offering deferral options to COVID-19-impacted borrowers who were ready to resume making their regular monthly payment. A particular provision of Regulation X, which we commonly refer to as the "anti- evasion clause," generally prohibits servicers from evaluating information received from a borrower and using it to offer loss mitigation options, unless and until the servicer collects a complete loss mitigation application from the borrower first. ere are very limited exceptions to the anti-evasion clause including, for example, a carve-out for short-term forbearance plans, which allowed for the CARES Act framework to work seamlessly. Recognizing that its own rules were about to get in the way of helping millions of impacted mortgage loan borrowers, the CFPB issued an interim final rule to add COVID-19 deferral options to the limited list of anti-evasion clause exceptions. Once again, this immensely benefited both consumers and servicers. Finally, along the same lines as the 2020 To have any meaningful chance of convincing the appropriate parties to make the recommended change, a proposal must not provide the industry with all the benefits, even if it is neutral for consumers; there must be some wins on the consumer side of the ledger. Feature By: Jonathan R. Kolodziej