As a result of Hurricane Harvey, hundreds of thousands of residential loans could become newly delinquent, with many becoming seriously delinquent.
Hurricane Harvey wreaked havoc on Houston and other Texas communities during the final week of last month, reaching category 4 status.
Department of Housing and Urban Development Secretary Ben Carson was quoted as telling Fox Business Network that 39 Texas counties were affected by the storm.
“There are 61 public housing authorities affecting the lives and families of over 48,000 people, and then there’s the multi-family units that are supported by HUD — over 20,000 families,” Carson reportedly said.
Mortgaged properties in the FEMA-designated disaster areas related to the hurricane number 1.180 million, according to Black Knight Financial Services. The loans have a collective unpaid principal balance of $179 billion.
That compares to just 0.456 million mortgaged properties with an aggregate loan balance of $46 billion that were impacted by Hurricane Katrina.
Jacksonville, Florida-based Black Knight said that 30-day delinquency in
FEMA-designated Katrina disaster areas in Louisiana and Mississippi exploded after the event — skyrocketing from 8.7 percent before the storm to 34 percent. Serious mortgage delinquency soared from 2.8 percent to 16.3 percent.
Given twice as many loans as Katrina with four times the collective balance, Harvey’s impact could result in borrowers missing at least one payment on 300,000 loans. In addition, 160,000 loans might become at least 90 days past due.
“Thankfully, Fannie Mae, Freddie Mac and the Federal Housing Administration have all announced temporary moratoria on evictions and foreclosure sales in Harvey-related disaster areas,” Black Knight Data & Analytics Executive Vice President Ben Graboske said in the report. “With these three organizations accounting for nearly 900,000 of mortgaged properties, the moratoria should help temper the negative effects.”
Hurricane Irma, a category 5 monster hurricane that has already devastated the Caribbean, is potentially on a path that could give Florida its worst storm ever.
