Real Estate

Monday Morning Cup of Coffee: Hurricane Matthew causes billions in insured property losses

Fannie, Freddie offer relief to hurricane victims

Monday Morning Cup of Coffee takes a look at news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.

Anyone hoping to hear housing policy mentioned in the debate last night between presidential candidates Donald Trump and Hillary Clinton was sorely disappointed. There was a discussion of taxes and a brief mention of the foreclosure crisis and the sluggish economy, but that was it. The next and last presidential debate is scheduled for Oct. 19.

Losses to residential and commercial properties from Hurricane Matthew, which just swept the Southeast coast, totaled between $4 and $6 billion from wind and storm surge damage, according to CoreLogic. The company also estimated that 90% of insurance claims will be related to wind, and the remaining 10% will be related to the storm surge.

The number of properties impacted from the storm total about 1.5 million, according to CoreLogic’s estimates.

In the midst of the devastation from the hurricane, Fannie Mae and Freddie Mac both sent out notices that homeowners in the region impacted by Hurricane Matthew have several mortgage assistance programs available to them.

Under Fannie Mae’s guidelines for single-family mortgages, servicers have the ability to grant an initial period of six months of forbearance, a time the homeowner is not required to make payments, to any borrower they believe has been affected by this natural disaster. Additional forbearance is available with approval from Fannie Mae. Fannie Mae’s guidelines also authorize servicers to delay foreclosure sales and other legal proceedings in these areas.

“We understand that many families and communities are hurting as they deal with the damage caused by Hurricane Matthew,” said Malloy Evans, Fannie Mae vice president of servicing.  “Fannie Mae and our servicers stand with homeowners who have been impacted by these extremely challenging conditions.”

“We are working with our servicers to ensure assistance is offered to borrowers and communities in need,” Evans said. “Our thoughts are with all of those who have been impacted.”

Similarly, Freddie Mac mortgage relief options for affected borrowers in these areas include suspending foreclosures by providing forbearance for up to 12 months, waiving assessments of penalties or late fees against borrowers with disaster-damaged homes and not reporting forbearance or delinquencies caused by the disaster to the nation's credit bureaus.

“We strongly encourage the many American families whose homes or businesses are being impacted by Hurricane Matthew to call their mortgage servicer once the Federal Emergency Management Agency's declaration is announced,” said Yvette Gilmore, Freddie Mac vice president of single-family servicer performance management. “Relief, including forbearance on mortgage payments for up to one year, may be available if their mortgage is owned or guaranteed by Freddie Mac.”

This hasn’t been a great week for natural disasters, as Southern California is currently on a watch for a major earthquake, according to an article by Nathan O’Neal for NBC.

A series of small quakes along San Andreas Fault, including many this past weekend, is leading experts to worry that a larger event could be still to come, and a new study shows that a rise in earthquake activity could be increasing foreclosures. 

California isn’t the only state dealing with earthquake activity. Oklahoma has also seen a rise in the past two years, according to a new report from ATTOM Data Solutions and Greenfield Advisors.

Across the state, earthquakes increased 375% from 2014 to 2016. During that same time, foreclosure activity increased by 19% after seeing a four-year downward trend.

“Oil prices that plummeted 64% during the same two-year period could also be contributing to the rise in foreclosure activity across the state, although it’s important to note that foreclosure activity actually decreased 14% during the same time period in Tulsa County, where no earthquake epicenters were reported,” said Daren Blomquist, ATTOM Data Solutions senior vice president.

“Meanwhile in Oklahoma County, where earthquake activity increased 20% over the past two years, foreclosure activity increased 39% over the same time period,” Blomquist said.

St. Louis took a new approach to affordable housing by starting plans to turn abandoned schools into places to live for teachers in an effort to keep them from leaving the city, according to an article by Ashley Lisenby for the St. Louis Post-Dispatch.

The first development, the Wilkinson project, is currently under development, according to the article. The developers said the school could be converted into about 40 apartment units.

From the article:

The Wilkinson School building was among the district’s properties listed in good condition and a good candidate for housing units. Three companies submitted proposals to the board to purchase the former school listed at $602,000.

The vacant school is among 22 recently marketed buildings by St. Louis Public Schools. Over several weeks in 2015 the district opened its doors to developers, held open houses and consulted with neighbors about best uses.

That’s it for this week’s MMCC. Have a great Monday and to those affected by Hurricane Matthew: stay safe. My thoughts and prayers are with you.

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