Harvey’s hit to mortgages could be four times worse than predicted

As many as 300,000 borrowers could become delinquent on their loans after Hurricane Harvey, Black Knight Financial Services says.

That is four times the original prediction because new disaster zones were designated and more homes flooded.

The sheer volume of homes hit by Hurricane Irma will likely cause an increase in mortgage delinquencies as well, though the storms are difficult to compare.

Diana Olick | CNBC

As homeowners in Houston struggle to dry out and rebuild, they may also struggle to make payments on their mortgages.

New estimates suggest as many as 300,000 borrowers could become delinquent on their loans and 160,000 could become seriously delinquent, that is, more than 90 days past due, when banks initiate foreclosure proceedings. This from Black Knight Financial Services, which compared mortgaged properties in the FEMA-designated disaster areas in Houston to those in Hurricane Katrina, and the resulting delinquencies in the four months following Katrina.

That is four times the original prediction because new disaster zones were designated and more homes flooded when officials released water from reservoirs to protect dams. The total number of mortgaged properties in disaster zones is 1.18 million. Houston disaster zones contain twice as many mortgaged properties than Katrina zones, with four times the unpaid principal balance.

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