DS News

50 RISING TO THE CHALLENGE With our nation and our industry facing continued and mounting threats from damaging natural disasters each new year, DS News speaks with a cross-section of experts about the challenges faced and solutions required. e mortgage servicing industry, and related satellite sectors such as property preservation providers, have navigated enormous challenges over the past two years, with headwinds both global and particular to the business of mortgage. But even amidst the unpredictable eddies of a global health crisis, the industry has continued facing the rising waters, both literal and metaphorical, of waves of increasingly common, and increasingly damaging, climate-related natural distasters. Hurricanes buffet coastal areas, causing both wind damage and widespread flooding. Drought continues to linger throughout many parts of the nation, with wildfires becoming an increasingly familiar presence throughout the west and southwest portions of the country. CoreLogic's 2021 Climate Change Catastrophe Report reported that more than 14.5 million single- and multifamily homes were impacted by the largest natural catastrophe events of 2021, with an estimated $56.92 billion in property damage. e Catastrophe Report further detailed that over 14.5 million homes were impacted by hurricanes, wildfires, winter storms, or severe weather in 2021. According to data from the National Centers for Environmental Information and National Oceanic and Atmospheric Administration (NOAA): "In 2021, there were 20 weather/climate disaster events with losses exceeding $1 billion each to affect the United States. ese events included 1 drought event, 2 flooding events, 11 severe storm events, 4 tropical cyclone events, 1 wildfire event, and 1 winter storm event. Overall, these events resulted in the deaths of 724 people and had significant economic effects on the areas impacted. e 1980–2021 annual average is 7.7 events (CPI-adjusted); the annual average for the most recent 5 years (2017–2021) is 17.8 events (CPI-adjusted)." According to May data from First Street Foundation's Wildfire Model, there are nearly 20 million properties that face "Moderate" risk of wildfire (up to a 6% chance of experiencing a wildfire over 30 years). NOAA data notes that the financial toll associated with wildfires has grown substantially, especially over the last half-decade, with $81.7 billion or 66% of all direct losses since 1980, occurring over the last five years. With FHFA Director Sandra ompson having stated that "climate change poses a serious threat to the U.S. housing finance system," there's no question that climate- related disasters remain a stark and expanding Cover Story By: David Wharton

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