A new report by Fitch Ratings [1]states that Hurricane Dorian is not expected to impact either commercial mortgage back securities (CMBS) or residential mortgage backed securities (RMBS) due to pool diversification, servicer advancing, and insurance coverage.
Hurricane season, though, does bring severe storms that can impact loan performance.
The report states that Fitch properties along the east and gulf coasts are susceptible to damage from hurricane or storm surges. Hurricane Dorian’s impact will be more modest than the hurricane season of 2017. Those hurricanes, most notably Harvey, Irma, and Maria, impacted residential mortgage performance temporarily, and delinquencies returned to pre-storm levels after 12 months.
The impact of Hurricane Maria made mortgage delinquencies rise to 21.5% in November of 2017.
It was reported earlier this year from the Insurance Journal that total losses from Hurricane Barry are expected to exceed $600 million. Additionally, public and private insurers paid out nearly $300 million according to the Aon Global Catastrophe Recap report.
In a report earlier this year, CoreLogic reported that insured residential and commercial flood loss covered by the NFIP is estimated to be between $100 million and $200 million after Hurricane Barry, but 20% of residential flood loss is uninsured.
CBS News reported t [2]hat Hurricane Dorian made landfall Friday in North Carolina after being downgraded to a Category 1 storm. The storm has maximum winds of 90 mph and 350,000 residents in both North and South Carolina were without power.
The storm’s eye came within 55 miles of Charleston, South Carolina, bringing heavy rain and wind gusts of more than 70 mph.
Dorian’s strength has fallen dramatically after it ravaged the Bahamas for nearly two days as a Category 5 storm.
The Washington Post reports [3]that authorities three out of every four homes on Grand Bahama are underwater, and recovery “will cost billions of dollars.”
The Post states that Prime Minister Hubert Minnis said Tuesday that the official death count has risen to seven, but expects that to increase as more of the damaged areas can be reached. [4]
“Parts of Abaco are decimated. There is severe flooding,” Minnis said. “There is severe damage to homes, businesses, other buildings and infrastructure.”
Bahamas Deputy Prime Minister Peter Turnquest said the island’s infrastructure is “wrecked.”
“With approximately 70% of the homes underwater, we anticipate tremendous social and economic dislocation and disruption in the short term,” Turnquest said in an interview with The Washington Post. “The mental health of those who have endured this monster storm is a priority concern of the government.