“The physical destruction caused by flooding and other extreme weather events will continue to influence the behavior of portfolio lenders, the GSEs, the federal government’s FHA/VA programs, and mortgage investors.”
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Becketti, who is also vice president and head of portfolio analytics at Freddie Mac, warned that unless governments, industries, and households take positive action, “the future path of climate change could continue to get much worse”.
The report based its findings on measurements taken over the last 150 years, concluding that there was “convincing scientific evidence” that global warming is contributing to sea-level rise, more storm surges, and reductions in glaciers and snow coverage. “Recent studies also draw links to increased droughts and inland flooding events,” it added.
It said climate change would place increasing stress on housing and housing finance’s sophisticated system of distributing risk across multiple stakeholders, including consumers, home builders, appraisers, originators, the GSEs and mortgage investors.