Borrowers in Ian’s Path 7X More Likely to Become Past Due on Mortgage

Hurricane Ian roared ashore as a Category 4 hurricane September 26 and tore across Florida leaving devastation in its wake. FEMA declared 26 Florida counties as disaster areas, a region encompassing 2.5 million mortgaged homes, raising the specter of property damage and mortgage delinquency in a population representing an aggregate unpaid balance of more than $500 billion.

Not all homes in that region were affected equally. It is reasonable to assume that homes in the direct path of the storm were at risk to sustain the most damage. But figuring out which properties were in the path, and the net effect of the storm on mortgage performance, requires a greater level of data precision than has been historically available.

Black Knight Disaster Alerts combine satellite and drone imagery with federal and state agency reports, Weather Service, FEMA, and other data sources to help lenders and insurers zero in on properties most likely to have been damaged and prioritize relief and remediation efforts within a targeted zone of elevated risk. Our data analysts combined that information with McDash Flash loan-level data to create a more precise damage estimate.

Specifically, we looked at payments received in affected areas through October 19 to the share received as of the same point in September, on the assumption that, all things being equal, any significant delay in payment could be reasonably attributable to Ian. You can read our complete analysis in the September 2022 Mortgage Monitor. Here are some highlights:

  • Of 2.5 million mortgaged homes in FEMA-designated disaster counties, only 355K were directly in the path of the storm and face a higher risk of property damage and mortgage delinquency
  • Another 100K were in the Disaster Alerts buffer zone, representing moderate risk, while more than 2M (80% of) properties in FEMA-declared counties were not in the direct path of the storm and are therefore at lower risk of financial loss and mortgage default
  • In Florida counties not declared disaster areas, 93.7% of October payments had been made, only marginally off the 93.9% as of the same day the prior month
  • For parcels directly in Ian’s path, just 92.8% of borrowers had made their October payments – a 3.3% drop from September
  • Impact in the Black Knight Disaster Alerts buffer zone was slightly less elevated, with 1.2% fewer payments made through the 19th
  • A mere 0.5% fewer October payments had been made in FEMA-declared counties outside of the buffer zone, suggesting those directly in the storm’s path were nearly 7X more likely to become past due than those in FEMA-declared counties outside of that path
  • If those deficits should hold true through the end of the month, approximately 20-25K borrowers in Florida can be expected to become delinquent as a result of the storm

Although Ian made a second landfall in the Carolinas, an analysis of Black Knight Disaster Alert and McDash mortgage performance data suggests storm-related delinquencies will be minimal. A Black Knight analysis found more than 200K homes in North Carolina and South Carolina that were either in the direct path of Ian or within a Black Knight-designated buffer zone. Considering the share of mortgage holders making scheduled payments through October 19 in the Carolinas was nearly identical to the prior month, we estimate a 95% smaller per capita impact in those states versus Florida.

Climate change is an evolving situation – and risk levels continue to increase. Our Climate and Natural Hazard Risk Data Solutions Suite covers over 95% of residential properties in the United States and is available via the Black Knight Rapid Analytics Platform (RAP). Individual elements are also offered as stand-alone data and analytics purchases.


View All

Recent Articles & Videos

Digitizing Mortgage Servicing With A “People First” Approach
Sandra Madigan

How Much Does a Mortgage Servicing System Cost?

Leave a Comment