Upcoming Hurricane Season Presents Greater Risk to Servicers

According to a new report by CoreLogic, as covered in Asset Securitization Report, the value of at-risk coastal homes has increased by 6.6 percent year-over-year. With nearly 7 million homes facing more than $1.6 trillion in potential storm-surge reconstruction costs, servicers have voiced concerns, especially when considering the fact that the increased estimate is predicated on high regional expenditures for construction equipment and labor in the most at risk states.

Of the $1.6 trillion, the report states that approximately 4 million homes representing $1 trillion in property are vulnerable along the Atlantic Coast, while the Gulf Coast represents the other $600 billion. With a 70 percent chance of 10 to 16 storms threatening life and property in 2018, many in the market fear the mortgage market could be disrupted in a similar fashion to last year, when storms like Irma and Harvey had a significant impact on payment speeds and collateral risk profiles.

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