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72 over from what the industry has learned from decades' worth of natural disasters, the COVID-19 pandemic is operating on a whole different scale. "COVID is obviously nationwide, so that's very unusual," said Gagan Sharma, President and CEO of BSI Financial. "Secondly, in a national disaster, one can typically have some visibility into when the natural disaster ends. Even when Superstorm Sandy occurred, it was over a certain number of days." THE ECONOMIC FALLOUT More than 40,000 structures were affected by the recent string of tornadoes across the Southeast U.S., causing damage that will cost in the hundreds of millions of dollars to repair. In a new report, CoreLogic identified the unique challenges added by COVID-19 to the recovery efforts. In Tennessee, Mississippi, Georgia, South Carolina, and Alabama, approximately 23,448 structures were potentially damaged, with a total reconstruction value of nearly $2.95 billion. As CoreLogic notes, experts are concerned that nonessential business shutdowns will drastically hinder the ability of these towns to recover through reconstruction. Fortunately, CoreLogic states, though much construction has been halted due to the pandemic, aggregate materials should still be available for builders. With softening demand for construction materials, manufacturers have ample supplies available for distribution, though there may be regional disparities regarding access to these resources. If reconstruction is deemed an "essential business," the construction labor supply should be adequate, though social distancing measures will likely slow down reconstruction efforts while adding to costs. Construction monitoring in the form of permits, approvals and inspections will also be necessarily delayed. "Displaced residents of damaged towns will experience significant ramifications of quarantine," reported CoreLogic. After a home is damaged by a tornado, homeowners are confronted with reconstruction costs followed by additional living expenses. As a result of hotel, restaurant and retail closures, these residents will have limited last-minute housing and sustenance options. With fewer hotel accommodations, homeowners will likely experience higher housing and commuting costs. Restaurant closures will add to the struggle by limiting access to prepared food." "With humidity, warm air and strong winds in the Southeast, many communities in the region worry that the coming storm season will bring more tornadoes and other severe weather," CoreLogic adds. "is will continue to be a challenge for the region as it simultaneously works to prevent the spread of COVID-19." As Tom O'Connell, VP of Disaster at Planet Home Lending, notes, the major difference between a natural disaster and COVID-19 is that COVID-19 is only about employment and income or the financial impact. Meanwhile, natural disasters directly impact properties. COVID-19 may impact a servicer's ability to assess these properties. "When a natural disaster happens, one of our procedures is to get out to the property as soon as possible to assess the damage of the property," O'Connell said. "Will that be able to be done if the social distancing is still in place?" LEARNING FROM THE PAST e novel coronavirus pandemic is a type of disaster that few alive have ever experienced, but preparation and response must naturally rely on the lessons learned from other types of large-scale crises. For most, this means relying on lessons learned from natural disasters, and how we're balancing the two responses. One common challenge leading up to and in the wake of a storm or other natural disaster is ensuring prompt and efficient communication with borrowers. For many businesses, this means keeping call centers up and running. However, as servicers—like everyone else—have been forced to move toward a work-from-home environment, systems and processes that may have been taken for granted are being challenged to settle into a new way of doing business. Sandra Jarish, President of Planet Home Lending, LLC, told DS News, "With both natural disasters and the current COVID-19 crisis that we're going through right now, you have to prepare your call agents with script, and you have to trigger a number of other tools and formats of outreach and communication to the borrowers," Jarish said. "Tools we use include targeted calling campaigns, email blast, website updates, and social media responses, and also we've been using buck slip messaging." "It's really important to keep that line of communication open," she added. O'Connell noted another major difference between a natural disaster and a global pandemic: the lack of an end in sight, making a transition to a work-from-home environment a unique challenge. "How long is this impact going to last?" O'Connell asked. "en if you throw in a natural disaster that happens, are we prepared to handle both at the same time, whether it's customer service or operations? We are looking at options, but it's really predicated on COVID-19." Sharma echoed O'Connell's concerns, noting that COVID-19 is far more widespread and long-lasting than a typical natural disaster, even thought the recovery period after a hurricane, for example, can stretch into the years. With no end currently in sight for the pandemic, we will be dealing with COVID-19 stacked on top of hurricane season, and Sharma suggests the economic impact will likely be severe. e key, he notes, is to make it easy for customers to work with servicers. "ere may be some changes to investor guidelines as to what we do," Sharma said. "If there are natural disasters on top of this COVID pandemic, and if this pandemic leads to significant job losses and so on, it'll make it even more challenging." "What will that do to borrower behavior?" he asked. "at's something that we'll just have to watch out for." Cover Story By: Seth Welborn

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