66
Climate change is accelerating the number and severity of climate-
and weather-related disasters that will have far-reaching impacts on the
housing finance industry. e stakes are high for mortgage lenders and
servicers and the borrowers they serve, as these events threaten both
purchase loan pipelines and servicing portfolios. When disaster strikes,
could data hold the key to a more fluid industry response?
DISASTERS ARE HERE TO STAY
According to a National Oceanic and
Atmospheric Administration (NOAA) report,
the United States bore 20 distinct billion-
dollar-plus climate and weather events in
2021, making it the third-most-costly year
on record with an estimated $145 billion
in damages. In December, a multistate
thunderstorm unleashed tornadoes that
carved a 200-mile path of destruction across
Kentucky, leveling the homes of more than
1,000 families. In the fall, Hurricane Ida
pummeled homes in the Gulf states, where it
made landfall before inundating the Northeast
with severe rain and flooding. And throughout
the year, 8,619 wildfires across the state of
California charred over 2.5 million acres of
land and reduced thousands of structures to
ash.
An examination of data from the last
four decades shows that these disasters have
become more frequent and costly over time
due to increased exposure (more property
to damage), increased vulnerability (more
properties being exposed to conditions they
were not built to withstand), and climate
change. Even when adjusted for inflation,
Feature By: Richard Gagliano
MANAGING PIPELINE
AND PORTFOLIO RISK
AMID ACCELERATING
MEGA-DISASTERS
What role does technology play in responding to the housing impacts of advancing
climate catastrophes?
