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70 NATURAL DISASTERS AND FINANCIAL/HOUSING INSTABILITY ere's no question that natural disasters can be a recipe for financial hardship and housing instability, especially for financially fragile families. e topic of natural disasters and the physical damage they cause is well covered, but their financial impact on individual residents is debated to a lesser extent. e costly effects are especially pronounced after smaller events, which, while more frequent, don't receive as much long-term recovery funding or temporary relief from financial institutions. It's not surprising that natural catastrophes lead to broad and often substantial negative impacts on the financial health of individuals. e financial toll can be seen across most measures of financial health, including credit scores, credit card debt, and mortgage performance. e physical damage to homes is just one of the ramifications. Natural disasters impact people's finances and income through various channels. For one, they have to pay for their mortgage while also paying to reconstruct their homes. A flooded home can leave homeowners with mortgage and rent expenses as they wait for their home to become habitable. Loss of property, such as cars and other belongings, can interrupt people's means of livelihood. Plus, there's the question of damage to commercial properties that supply jobs to the local community. What happens when they're burned down, flooded, or irreparably damaged? Residents in disaster-damaged areas often find themselves out of work and without the income they need to make regular bill payments. It's also notable that low-income individuals and communities are disproportionately affected by natural disasters. ey are often more likely to be affected by natural disasters and are more prone to lose a larger fraction of their wealth because they are less able to cope with and recover from the financial impacts. MORTGAGE DELINQUENCY RATES AFTER A NATURAL DISASTER Disasters are one of the main causes of mortgage arrears and defaults because they elevate the risk of financial instability. e financial setbacks of a natural disaster are multiple and occur simultaneously, leaving people unable to meet their short-term financial obligations, thereby increasing the likelihood of mortgage delinquency among affected residents. Considering that businesses may be shattered for days—if not weeks or months—in the aftermath of a disaster event, even those whose homes weren't damaged, they may face an increased risk of delinquency. Many natural disasters have the potential to interrupt commerce while causing widespread property damage, but hurricanes tend to steal the show. Hurricane-driven high winds and storm surges can wreak havoc over an expansive geographic area in a matter of days or even hours. As an example, 2017's trio of hurricanes—Harvey, Irma, and Maria— tripled mortgage delinquency rates in affected communities. After Harvey and Irma, an analysis of checking account data found a decline in checking account inflows of over 20%, which suggests diminishing incomes. is, in addition, to rising housing expenses due to property repairs costs, can financially overwhelm residents. What about the infusion of relief funds from government and charitable sources? e expenses for hurricanes and other disasters are usually picked up by a variety of public sources, including the Federal Emergency Management Agency (FEMA) and the U.S. Department of Housing and Urban Development. State and local funds also chip in to offset some disaster-related costs. e Small Business Administration (SBA) also provides loans to enable homeowners to rebuild. Homeowners insurance can also protect homeowners in case of disasters, but as Bankrate explains, a standard homeowners' Feature By: John Thomas Disasters cause major disruption for those in the housing market, leaving people unable to pay their bills in full and on- time in the months after a disaster.

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