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69 play phone tag as they are trying to pick up the pieces. Better disaster impact data also makes it possible for servicers to identify damaged properties—and exclude unaffected ones— more quickly and with greater accuracy. While FEMA disasters are reported at the county level, disaster geofencing enables servicers to understand the breadth of impact with greater precision. For instance, if an isolated wildfire touches five California counties, FEMA will unilaterally declare all five of those counties as disaster areas. Giving servicers the ability to narrow down an area of impact from millions of buildings to a few dozen homes makes it possible to assess and triage damage quickly and efficiently. It also saves servicers the cost of dispatching resources to unimpacted locations. When integrated with servicers' systems of record, disaster intelligence can help them quickly understand their risk and hedge their portfolios accordingly. at's because disasters produce increases in mortgage defaults, and the cost to service a nonperforming mortgage is significantly higher than the cost to service a performing mortgage. Likewise, disasters increase prepayment rates, another portfolio risk that must be managed. BENEFITS FOR LENDERS Disasters don't just pose challenges to mortgage servicers; they also disrupt front-end home purchases and sales. In the moment of a catastrophe, lenders— who are less accustomed to managing the complications of disasters—often scramble to understand how their deals are impacted by an event. Not knowing stresses prospective borrowers and increases costs for lenders, real estate agents, and settlement partners as time is spent spinning wheels trying to decide on next steps. However, when equipped with technology that brings visibility into loan files affected by disaster, lenders can develop a better business response. Disaster-tracking intelligence is often capable of differentiating between areas that have a high probability of substantial property damage and so-called "buffer zones"—surrounding areas where properties may or may not be affected. e ability to narrow down properties impacted by a disaster enables lenders to save on resources. For instance, the right data can help lenders feel confident in moving forward with closings for addresses that are outside the immediate impact area and surrounding buffer zones. And within buffer zones, lenders may be able to save money by ordering drone or drive-by appraisals to determine if properties have sustained damage that warrants a new inspection or collateral valuation. Disaster intelligence also helps lenders manage their pipelines. Because disaster intelligence can determine properties affected at the street address level, loans that have likely been damaged or destroyed can be flagged, making lenders aware of files that will require lock extensions or present revenue risk. And lastly, disaster intelligence helps lenders be a better partner to borrowers and business partners. Disaster intelligence may make lenders the first to know when a property is affected, giving them the opportunity to proactively reach out to homebuyers, real estate professionals, and closing partners to notify them of damage or closing delays. No one knows exactly when disaster will strike. But with disaster-tracking intelligence integrated with systems of record, lenders and servicers can better assist impacted homeowners while improving their ability to manage associated business risks. Rich Gagliano, President, Origination Technologies Division, Black Knight, Inc. With 30 years of experience in the financial services industry, Gagliano offers a wide range of lending-product knowledge and insight. He earned a bachelor's degree in business administration from Southeast Missouri State University and an MBA in finance from Saint Louis University. As large-scale climate and weather events become the new normal, disaster intelligence will play an integral role in servicers' and lenders' responses.

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