Hurricane Irma may potentially affect a significantly larger number of mortgages and amount of associated unpaid principal balances compared to Hurricane Harvey, according to a preliminary assessment released by the data and analytics division of Black Knight Financial Services.
“While the total extent of the damage from Hurricane Irma is still being determined, it is clear that the size and scope of the disaster is immense,” said Ben Graboske, executive vice president for data and analytics at the company. “Indeed, in terms of the number of mortgaged properties and their associated unpaid principal balances, Irma significantly outpaces even the number of borrowers impacted by Hurricane Harvey. With [the Federal Emergency Management Agency] expanding the number of Irma-related designated disaster areas late Wednesday, Sept. 13, to a total of 37 Florida counties, more than 90% of all mortgaged properties in the state now fall into such areas.”
According to Black Knight, there are a total of 3,140,000 mortgaged properties in FEMA-designated disaster areas related to Hurricane Irma. This compares to 1,180,000 mortgaged properties in Harvey-related disaster areas and 456,000 mortgage properties in Katrina-related disaster areas.
The unpaid mortgage balances in Irma-related disaster areas were assessed to be at $517 billion, compared to $179 billion in Harvey-related areas and $46 billion in Katrina-related areas.
“As Irma forged its path of destruction through the Caribbean, one relatively positive development was that Puerto Rico escaped the direct hit many had predicted,” Graboske said. From a mortgage performance perspective, this was particularly good news, as delinquencies there were already quite high leading up to the storm.”
Puerto Rico has a delinquency rate of more than 10% and a serious delinquency rate of 5.8%, both almost three times that of the US average. Meanwhile, the starting delinquency rates for the Florida disaster areas related to Hurricane Irma are below the national average, said Graboske.
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