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79 79 INVESTMENT GOVERNMENT PROPERTY PRESERVATION Journal Follow Us At: @DSNewsDaily TEXAS TORNADOES CAUSE NEARLY $4.6B IN PROPERTY DAMAGE According to CoreLogic, hail, straight-line winds, and tornadoes from a strong low-pressure system damaged approximately 18,600 single- and multifamily residential properties across the Gulf Coast area of Harris County, Texas on January 24, 2023, with a combined reconstruc- tion value (RCV) of $4.6 billion. An Enhanced Fujita Scale (EF Scale) tornado with a rating of three destroyed homes, and disrupted operations at petrochemical facilities outside of Houston, Texas, as the area was hit with wind gusts in the 136 to 165 miles-per-hour range. e tornado's path extended over 18 miles, and the maximum width of the storm was 1,000 yards. e National Weather Service Storm Pre- diction Center drew the Harris County storm a Level 3 out of 5 "enhanced" risk of severe weather on its maps, signifying the potential for a disruptive and dangerous event. e Enhanced Fujita Scale or EF Scale is used to assign a tornado a 'rating' based on esti- mated wind speeds and related damage. e EF Scale was revised from the original Fujita Scale to reflect better examinations of tornado damage surveys, to align wind speeds more closely with associated storm damage. e new scale has to do with how most structures are designed. Not all properties within the tornado footprint suffered damage, and a damaged structure may not have suffered 100% loss up to the full reconstruc- tion value. e number of damaged properties will be a subset of the total 18,600 homes. e damage survey reports a near-contin- uous path of destruction across portions of the county, including the cities of Houston, Pasade- na, Deer Park, and Baytown. e survey report- ed damage at EF-2 levels (wind gusts in the 111 to 135 miles-per-hour range) for an apartment complex in southeast Houston, several homes in Pasadena, and a church in Deer Park. Addition- al damage to several single-family residences and mobile homes was reported, and no injuries or fatalities were reported. e National Oceanic and Atmospheric Administration (NOAA) Storm Prediction Center (SPC) confirmed EF-0 to EF-3 level tornado damage in Harris County. Harris County, Texas is home to a number of large industrial facilities, including petro- chemical refineries, manufacturing plants, and shipping operations. Companies such as Shell, Exxon Mobile and TotalEnergies operate in Harris County. Shell and Petróleos Mexicanos (Pemex) reported operational upsets due to the severe weather outbreak on January 24. Other companies such as Exxon Mobil and TotalEn- ergies sent personnel home before the outbreak and avoided any operational disruptions, dam- age, or injuries. Delays in operations could have material downstream effects. FITCH REPORT: NEW REO INVENTORY ON THE RISE With a recession looming, mortgage ser- vicers have not stopped working with struggling homeowners in the post-COVID-19 era to avoid defaults where possible. However, as post-moratorium data begins to flow in, Fitch Ratings reports that new REO inventory— properties in the 1- to 179-day category—have increased by 14.5%, reflecting the uptick in active foreclosure filings in 4Q22. "While loan portfolio delinquencies for Fitch-rated bank and non-bank servicers were stable for the third consecutive quarter, the impact of four consecutive quarters of new foreclosure filings post-moratoria is now being felt in new REO volume," said Fitch Director Richard Koch. Bankruptcy and foreclosure filings and 60-90+ day delinquencies showed no significant change quarter over quarter for bank servicers, while non-bank servicers reported a 1% increase in new foreclosure filings. On the topic of loan modifications, banks and non-bank servicers reported a small de- crease in loan mods quarter over quarter to 31% from 35% and 17% from 20%, respectively. Ac- tive forbearance plans for banks and non-banks reflected an increase quarter over quarter to 37% from 35% and 42% from 40%, respectively. "e increase in forbearance applications may be attributable to the CARES Act extension through 1Q23," Fitch said. "Other exit strategies, such as short sales, deferments and deed-in-lieu of foreclosure account for 29% of monthly loss mit- igation workout volume for non-bank servicers, an increase of 7% from the previous quarter while bank servicers reported it unchanged at 2%." Among other data reported by Fitch, bank servicers reported a decrease in full-time employees for the third quarter with an average reduction of 10.5% from the last quarter while non-bank servicers upstaffed by about 5% on average from the previous quarter.