Latest news with #JeremyPorter
Yahoo
02-08-2025
- Business
- Yahoo
How Climate Change Could Cause Foreclosure Rate To Spike Nearly 400%
Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. Climate change could be responsible for a 380% increase in foreclosures by 2035, according to research firm First Street's most recent National Risk Assessment. The assessment also predicts the economic impact of these foreclosures on lenders, and the potential losses could be staggering. First Street's analysis expects mortgage lenders to lose $1.2 billion in natural disaster-related foreclosures in 2025. That figure is expected to go as high as $5.4 billion by 2035. Losses that big could change how mortgage lenders calculate risk. Currently, most mortgage lenders consider the borrower's income, credit history, and debt load as the biggest potential risks in processing loan applications. First Street believes lenders may be forced to consider how extreme weather events could elevate their risk level when making underwriting decisions. Most banks don't consider the possibility of climate-change-driven foreclosure risk in making loan decisions. First Street assessment suggests they should. Don't Miss: 'Scrolling To UBI' — Deloitte's #1 fastest-growing software company allows users to earn money on their phones. Accredited Investors: Grab Pre-IPO Shares of the AI Company Powering Hasbro, Sephora & MGM— The potential for billions of dollars in losses is among the many "hidden risks of climate change," Jeremy Porter, head of climate implications for First Street, told CBS MoneyWatch. However, lending isn't the only sector where the possibility of major losses exists. The numerous kick-on effects of climate change are already impacting the insurance industry, which is a critical piece of the home ownership and financing equation. Insurers nationwide are already raising premiums to account for the increased risks that come with climate change. Those premium increases are already eating into buyers' purchasing power and monthly budgets. First Street estimates that the nationwide foreclosure rate increases by 1% for every 1% increase in insurance premiums. That's assuming borrowers can even get insurance at all. Many states are already reeling from a one-two punch insurance crisis. Major insurers are exiting California and Florida, while the remaining insurers are raising premiums to astronomical levels. It's only a matter of time before that trend begins spreading to other states at elevated risk of climate-related disasters. The Gulf Coast and many Sunbelt states are all facing a massive uptick in extreme weather events whose effects are exacerbated by climate change. Trending: $100k+ in investable assets? – no cost, no obligation. First Street believes this combination of all these factors could make climate-change-related foreclosures a national crisis. Buyers are already stretched to their limit in terms of home prices. Consequently, they avoid markets with high property values and/or elevated insurance premiums. That, combined with the risk of natural disaster, drives down property values in the affected markets. This eats into a homeowner's equity. At the same time, homeowners in those markets are paying insurance premiums based on the original elevated property values. First Street's assessment used Hurricane Sandy as an example. It noted that property values had dropped by 14% in the five years before the storm. Declining property values, reduced equity, and damage from flooding caused foreclosures in the affected areas to spike, leaving lenders with a $68 million loss. Homeowners often find themselves stuck between a rock and a hard place after natural disasters. Imagine yourself buying a $450,000 home in Florida with bank financing. The mortgage lender requires you to carry a policy covering the house, and a natural disaster hits. You file a claim, and the insurer declares your home a total loss. , If you still owe money on the mortgage and the claims payout doesn't satisfy the debt, you're stuck, and so is your mortgage lender. You're not going to continue paying a mortgage on a house you can't live in after it's been destroyed by a natural disaster. At that point, your best option may be to walk away from the house. Now, imagine being a regional bank carrying thousands of mortgages in the same area. If a large percentage of those homeowners walk away from the house, lenders get left with a foreclosure spike. All it takes is one natural disaster to start this cycle. Unfortunately for lenders and borrowers alike, climate change is increasing the frequency of natural disasters. Those disasters are becoming increasingly powerful. It all adds up to an elevated risk level that lenders will have to account for going forward. All of this is more bad news for prospective homebuyers. If foreclosures spike and the risk of lending increases, banks will respond the only way they know how: by making it more expensive to borrow money. It's another canary in the coal mine or the U.S. real estate industry. Read Next: With Point, you can Image: Shutterstock This article How Climate Change Could Cause Foreclosure Rate To Spike Nearly 400% originally appeared on
CBS News
14-07-2025
- Science
- CBS News
FEMA's flood maps often miss dangerous flash flood risks, leaving homeowners unprepared
Jeremy Porter is a professor of quantitative methods in the social sciences at the City University of New York. Deadly and destructive flash flooding in Texas and several other states in July 2025 is raising questions about the nation's flood maps and their ability to ensure that communities and homeowners can prepare for rising risks. The same region of Texas Hill Country where a flash flood on July 4 killed more than 130 people was hit again with downpours a week later, forcing searchers to temporarily pause their efforts to find missing victims. Other states including New Mexico, Oklahoma, Vermont and Iowa also saw flash flood damage in July. The U.S. Federal Emergency Management Agency's flood maps are intended to be the nation's primary tool for identifying flood risks. Originally developed in the 1970s to support the National Flood Insurance Program, these maps, known as Flood Insurance Rate Maps, or FIRMs, are used to determine where flood insurance is required for federally backed mortgages, to inform local building codes and land-use decisions, and to guide flood plain management strategies. In theory, the maps enable homeowners, businesses and local officials to understand their flood risk and take appropriate steps to prepare and mitigate potential losses. But while FEMA has improved the accuracy and accessibility of the maps over time with better data, digital tools and community input, the maps still don't capture everything — including the changing climate. There are areas of the country that flood, some regularly, that don't show up on the maps as at risk. I study flood-risk mapping as a university-based researcher and at First Street, an organization created to quantify and communicate climate risk. In a 2023 assessment using newly modeled flood zones with climate-adjusted precipitation records, we found that more than twice as many properties across the country were at risk of a 100-year flood than the FEMA maps identified. Even in places where the FEMA maps identified a flood risk, we found that the federal mapping process, its overreliance on historical data, and political influence over the updating of maps can lead to maps that don't fully represent an area's risk. What FEMA flood maps miss FEMA's maps are essential tools for identifying flood risks, but they have significant gaps that limit their effectiveness. One major limitation is that they don't consider flooding driven by intense bursts of rain. The maps primarily focus on river channels and coastal flooding, largely excluding the risk of flash flooding, particularly along smaller waterways such as streams, creeks and tributaries. This limitation has become more important in recent years due to climate change. Rising global temperatures can result in more frequent extreme downpours, leaving more areas vulnerable to flooding, yet unmapped by FEMA. For example, when flooding from Hurricane Helene hit unmapped areas around Asheville, North Carolina, in 2024, it caused a huge amount of uninsured damage to properties. Even in areas that are mapped, like the Camp Mystic site in Kerr County, Texas, that was hit by a deadly flash flood on July 4, 2025, the maps may underestimate their risk because of a reliance on historic data and outdated risk assessments. Political influence can fuel long delays Additionally, FEMA's mapping process is often shaped by political pressures. Local governments and developers sometimes fight to avoid high-risk designations to avoid insurance mandates or restrictions on development, leading to maps that may understate actual risks and leave residents unaware of their true exposure. An example is New York City's appeal of a 2015 FEMA Flood Insurance Rate Maps update. The delay in resolving the city's concerns has left it with maps that are roughly 20 years old, and the current mapping project is tied up in legal red tape. On average, it takes five to seven years to develop and implement a new FEMA Flood Insurance Rate Map. As a result, many maps across the U.S. are significantly out of date, often failing to reflect current land use, urban development or evolving flood risks from extreme weather. This delay directly affects building codes and infrastructure planning, as local governments rely on these maps to guide construction standards, development approvals and flood mitigation projects. Ultimately, outdated maps can lead to underestimating flood risks and allowing vulnerable structures to be built in areas that face growing flood threats. How technology advances can help New advances in satellite imaging, rainfall modeling and high-resolution lidar, which is similar to radar but uses light, make it possible to create faster, more accurate flood maps that capture risks from extreme rainfall and flash flooding. However, fully integrating these tools requires significant federal investment. Congress controls FEMA's mapping budget and sets the legal framework for how maps are created. For years, updating the flood maps has been an unpopular topic among many publicly elected officials, because new flood designations can trigger stricter building codes, higher insurance costs and development restrictions. In recent years, the rise of climate risk analytics models and private flood risk data have allowed the real estate, finance and insurance industries to rely less on FEMA's maps. These new models incorporate forward-looking climate data, including projections of extreme rainfall, sea-level rise and changing storm patterns — factors FEMA's maps generally exclude. Real estate portals like Zillow, Redfin, and now provide property-level flood risk scores that consider both historical flooding and future climate projections. The models they use identify risks for many properties that FEMA maps don't, highlighting hidden vulnerabilities in communities across the United States. Research shows that the availability, and accessibility, of climate data on these sites has started driving property-buying decisions that increasingly take climate change into account. Implications for the future As homebuyers understand more about a property's flood risks, that may shift the desirability of some locations over time. Those shifts will have implications for property valuations, community tax-revenue assessments, population migration patterns and a slew of other considerations. However, while these may feel like changes being brought on by new data, the risk was already there. What is changing is people's awareness. The federal government has an important role to play in ensuring that accurate risk assessments are available to communities and Americans everywhere. As better tools and models evolve for assessing risk evolve, FEMA's risk maps need to evolve, too.
11-07-2025
- Climate
FEMA maps underestimated risk in catastrophic Texas flood, data shows
The risk of the catastrophic flooding that struck Texas Hill Country as people slept on July 4 and left at least 120 dead was potentially underestimated by federal authorities, according to an ABC News analysis of Federal Emergency Management Agency data, satellite imagery and risk modeling. Some of the youth camps and recreational areas most devastated by the extreme weather were established on land designated by the FEMA as "special flood hazard areas" or in the river's floodway, making them especially vulnerable to the July 4 flash floods that exceeded some federal estimates for a worst-case scenario. At some points, water extended for hundreds of feet outside the Guadalupe River's banks and beyond FEMA estimates, according to satellite data. First Street, a risk modeling company, told ABC News that the company believes that more than double the 8 million homes nationwide that are designated by FEMA to be in flood zones are actually at risk, finding that government models are outdated and fail to consider extreme weather events. Devastated camp 'predominantly in a flood zone' Along the river banks in Kerr County, the all-girls Camp Mystic was overrun by flood waters, which claimed the lives of 27 campers and counselors and swept multiple buildings from their foundations. According to FEMA maps, more than a dozen of the 36 cabins were located within areas designated as high risk for potential flooding on the river and nearby Cypress Creek. "We knew this camp was predominantly in a flood zone, and even the areas that we showed that were outside were right on the edge of a flood zone," said Jeremy Porter, the head of climate implications research at First Street, which provides climate data for companies like Zillow and Redfin. Multiple buildings at Camp Mystic, including four cabins, were built within the Guadalupe River's "regulatory floodway," where most new construction is severely limited due to flood risk and to "protect human life and health," according to Kerr County's Flood Damage Prevention Order from 2020. The document noted that the stretch of land where Camp Mystic is situated is "an extremely hazardous area due to the velocity of flood waters which carry debris, potential projectiles and erosion potential." An additional 12 cabins at Camp Mystic were built on land designated as "special flood hazard areas," where residents face a 1% chance of flooding annually and are normally required to have flood insurance. "These should guide where you should or should not construct, whether you should have mitigation processes in place, like putting homes on elevated beds," said Jonathan Sury, a senior staff associate at the National Center for Disaster Preparedness at Columbia University in Manhattan. But some of those structures at the nearly 100-year-old camp were built decades before FEMA began issuing its flood maps in the 1960s and were likely permitted to remain despite modern construction regulations, Porter noted. A row of cabins at Camp Mystic sat directly behind the "special flood hazard area" and was deemed a lower risk for typical flooding. However, the extreme flash-flooding over Independence Day weekend inundated even the area thought to be at lower risk for flooding, satellite and radar analysis show. 'Outdated' maps At its maximum point, the floodwaters were recorded to be more than 500 feet from the Guadalupe River banks, and more than 200 feet from the edge of the FEMA Special Flood Hazard Area, according to the satellite data. The satellite data was collected and provided to ABC News by ICEYE, a company operating synthetic aperture radar satellites, which can obtain real-time data worldwide by using radar pulses to generate data. The data collected measures the depth of the water in a given location. Other areas along the Guadalupe River were not only vulnerable to flooding but also saw a higher-than-expected water level, exceeding the area marked for a 0.2% annual chance of inundation. Experts told ABC News that Texas practices "very little oversight" over youth camps, and state officials last week approved Camp Mystic's emergency plans. At the Heart O' the Hills Camp for Girls – where 1 person was killed – at least seven structures were built in the Special Flood Hazard Area. The data shows that the floodwater reached up to 220 feet from the riverbed. Floodwaters devastated RV parks north of the other camps on the Guadalupe River. More than 60 RV spots had been situated in the FEMA-designated Special Flood Hazard Area. Satellite data shows the area was covered in floodwater spanning the entire RV park. Lorena Guillen, the owner of the Blue Oak RV Park, told ABC News that she was familiar with where her business fell on the FEMA flood map and never considered that the floodwaters could reach as far as they did last week. "It's always come up…but there was nothing that would give us an indication that the flood was going to get all the way up 35, 40 feet high in 40 minutes," she said. "Everything is gone. And there is so much debris, so much cleanup to do that it is going to take, it's going to take months and months." Requests for comment to the camps and FEMA were not immediately answered. "Our City of Kerrville and Kerr County leadership are committed to a transparent and full review of processes and protocols," the Kerr County Joint Information Center said in an email. "The special session [of the state legislature] will be a starting point in which we will begin this work, but our entire focus since day one has been rescue and reunification." According to Porter, the extent of the flooding at Camp Mystic and other areas is representative of a broader problem with FEMA's modeling, which places 8 million properties across the country at risk of a 100-year flood. FEMA's flood maps are generally used by the government to determine what insurance requirements are needed for homeowners, according to Lidia Cano Pecharroman, a researcher at MIT Department of Urban Studies and Planning."When planning for flooding we cannot be over-reliant on these maps," she said. "They are a useful tool but they are based on limited modeling and data." FEMA's model considers factors like coastal storm surge and risks of flooding along river channels, but does not take into account heavy precipitation, such as the extreme rains that swept across Texas last week, Porter said. "They're outdated in the sense that they're not climate corrected," Porter said. "As those intensities increase of those rainfall events, we're getting more rainfall happening all at once. It's filling the waterways, and we're seeing rapid increases in the river levels." First Street estimates that more than 2.2 times the number of properties at risk of hundred-year floods than FEMA's model suggests. "It's a devastating event that occurred, but people should look at it and say, you know, if we know our risk, we should retrofit our buildings," said Porter. "We should make sure that they're designed to a standard that can withstand the risk that exists in an area right outside of that flood zone."
Yahoo
16-06-2025
- Business
- Yahoo
Nearly half of Fresno residents will flee due to climate risks, report predicts
Reality Check is a Fresno Bee series holding those in power to account and shining a light on their decisions. Have a tip? Email tips@ A new risk report from a private firm predicts a large exodus of residents from Fresno County as the effects of climate change exacerbate the region's issues and costs of living in the next three decades. The risk-assessing firm, First Street, calculated 45.8% of Fresno County residents would abandon the county by 2055 because of rising insurance rates and decreasing land values. The report also projected a nearly 15% impact on costs in the region as home values decrease and the cost to insure them rise. Fresno topped the list of the areas effected most above Sacramento County and a couple of counties in New Jersey. The firm's prediction showed Fresno's hot weather and poor air quality could continue to worsen, driving down the desirability of the homes and pushing up insurance rates. Other parts of California have stronger economic outlooks that could help mitigate those issues, but Fresno's economic health typically struggles, noted Jeremy Porter, the head of climate implications for First Street. 'Fresno has had relatively stagnant economic growth with baseline population forecasts showing a stagnant growth rate into the future,' he said in an email. 'Together these indicators serve to amplify the impact of the climate risk that does exist.' Experts in the San Joaquin Valley who spoke with The Bee expressed skepticism of the report's bold assessment of Fresno County. While climate change would be expected to lead to displacement of residents, predicting the magnitude gets shaky because it includes so many factors, according to Naomi Bick, a Fresno State professor who studies climate change and urban politics. 'It's hard to know exactly how bad that abandonment and people leaving will be, because it depends on how other areas are as well and what they're facing,' she said. 'And then also what cities and counties and places do to prepare for climate change.' But, Bick said, the Valley is known to have disadvantaged communities, which could have greater difficulty adapting. Along with the rising temperature from climate change, the Valley could expect to see wider fluctuations in precipitation, according to Crystal Kolden, a professor and director of the UC Merced Fire Resilience Center. The Valley got a taste of those fluctuations in 2023 when unusually heavy rainfall fell on the snowpacked Sierra and resurrected Tulare Lake. Years with record-breaking rainfall could be followed by severe droughts under the weather swings of climate change. Kolden said she was skeptical of the First Street report, particularly as it pertains to wildfires, saying its assessment of Fresno does not delineate between the fire hazards of the flammable foothills and the less serious potential for fire in the Valley. The Valley's air can be affected by the occasional wildfire as it was during the Creek Fire in 2020, but often winds send the smoke east. 'I have not yet seen the types of risk models that have any level of accuracy about wildfire smoke in the future in part because it's so dependent upon low and high pressure systems moving through,' she said. The assessment also does not account for engineering solutions municipalities can develop to compensate for changes. First Street projected out to 2055 assuming no change to modern mitigation. 'In California, we just keep rebuilding and we figure out how to engineer our way out of it,' Kolden said. 'People are not depopulating hot areas. They're figuring out how to develop engineering solutions that allow for cooling.' Scientists are already working on solutions for re-purposing irrigated cropland, which is expected to lead to improvements in the Valley when it comes to the effects of climate change, according to Angel S. Fernandez-Bou of the Union of Concerned Scientists based in Merced. He said the First Street report uses 'coarse' data that can be less accurate. 'The report doesn't consider what we in the (San Joaquin Valley) are already doing to make this a better place,' he said in an email. 'I think we can transform the Valley into a climate resilient region.' The way insurance companies approach the state of California has begun to change due to climate change. State Farm stopped issuing new policies and this year requested fee hikes by an average of 22%. Home buyers seek out homes for their school districts or other desirable characteristics, and are rarely asking about potential hazards, according to Ken Neufeld, a broker with London Properties in Fresno for 45 years. 'Flooding is hardly on the radar,' he said. Brokers provide home buyers with information for homes in natural disaster zones, he said, but flooding only comes into question in areas where a breach of a dam would cause flooding. While buyers aren't asking about climate risks, they're often forced to insure against them, according to Jason Farris, president-elect of the Fresno Association of Realtors. He said he's been asked about flood zones fewer than five times in the last two decades. 'People are getting quotes for insurance premiums before getting into escrow on the property,' he said. 'People are spending a lot of money to get into a home.' But the Valley's climate experts say it'll take political will to adopt mitigating regulations and the participation of the region's residents to lighten the potential climate issues. Kolden said people often return to burned down foothills or flooded lowlands to rebuild and only leave the most undesirable areas behind. 'It is up to the local municipality, whether it's a county or incorporated areas, a town or a city, to actually enforce those codes,' Kolden said. 'When these communities are rebuilding after a fire, there's an enormous amount of political pressure to not hold people to those standards.'
Yahoo
30-05-2025
- Business
- Yahoo
Home insurance protects against climate change. But report finds millions are missing out.
In the housing market, homeowners insurance has become the embodiment of the effects of climate change. Over the past several years, more frequent and more expensive severe weather events have strained insurance companies, even as skyrocketing premiums punish homeowners' wallets. Now, new research proves what many observers have assumed but rarely quantified: Insurance does shield homeowners from financial trouble in the wake of weather disasters, but existing guidelines for coverage are nowhere near adequate for the scale and scope of potential perils. Even more concerning, insurance costs may soon become too much for homeowners to afford. More: Homeownership used to mean stable housing costs. That's a thing of the past. The research comes from a report called "Climate, the Sixth 'C' of Credit," released May 19 by First Street, a climate risk financial modeling organization. 'I really wanted to prove that insurance is working, where homeowners have insurance,' Jeremy Porter, head of climate implications for First Street, said in an interview with USA TODAY. To do that, First Street looked at dozens of severe weather events since 2000. In incidences of wildfire and severe wind, few homeowners faced distress. Floods are a different story, however. Homeowners' insurance does not cover flood damage, so any property that's considered at risk of flood needs to carry flood insurance. But FEMA, the federal agency tasked with assessing what parts of the country are at risk, drastically underestimates the number of properties that should be covered, Porter said. First Street reckons there are 17.7 million properties that should be covered by mandatory flood insurance – more than double the 7.9 million that lie in FEMA's 'Special Flood Hazard Areas.' The discrepancy, Porter said, is because FEMA does not account for severe precipitation in its models. The states with the most of these additional properties are Texas, Pennsylvania, California, New York and Ohio. While First Street's analysis found a vast majority of counties across the country has a greater number of properties in a flood risk area than what has been defined by FEMA, the most striking findings are the places where the gap between the assessments is the biggest. For example, Letcher County in Kentucky has about 11.4% of its properties in FEMA's special flood hazard area. First Street puts that figure at 60.6%. That difference of nearly 50 percentage points is the widest margin of any county, according to a USA TODAY analysis of the report's data. Kentucky contains six of the top 10 counties with the biggest gaps between the assessments. Some in Virginia and West Virginia complete the ranking. In two-thirds of the floods First Street examined, uninsured homeowners were found to have experienced so much financial distress that damage from extreme weather eventually led to foreclosures. A foreclosure is the most extreme outcome of housing market distress, but it's also the easiest to track, Porter said. That means that all the various steps along the way – from mortgage delinquencies to defaults to cures – may also be occurring in storm-damaged areas, without being recorded. First Street uses Hurricane Sandy, which battered New York City in 2012, as an example of this phenomenon. There were nearly 400 more foreclosures in the area hit hardest by Sandy, the report shows. The areas hardest hit by Sandy had suffered during the subprime crisis – when some homeowners were charged exorbitant mortgage interest rates – and subsequent recession, and home prices had not yet started to rise again. That's another important component of the foreclosures First Street tracked: areas where home prices are rising tend to avoid falling into distress. But it's important to note that where foreclosures are seen, undamaged properties are at risk just as much as damaged ones are. That's partially because a bad storm will impact a community overall, Porter said – services like transportation will go down, people will be unable to get to work, businesses will stay closed. Insurance costs will also likely rise, and the value of even undamaged homes may increase more slowly. 'It's almost like insurance not only protects the property, but it protects the community in a lot of ways,' Porter told USA TODAY. For all the benefits that insurance can provide, the key challenge is that it's expensive – and getting more so. From 2000 to 2013 or so, homeowners' insurance made up about 3% to 4% of the average monthly mortgage bill for Americans, First Street data show. But premiums have skyrocketed since that time, and now account for over 10% of mortgage payments.'There's an indirect effect of additional cost of homeownership that people didn't expect to have when they first took out their mortgage, which is being indirectly driven up because of the increasing severity and frequency of climate risk,' Porter said. First Street's analysis of homeowner costs found that every 1% increase in an insurance premium is associated with a 1% increase in likelihood of foreclosures. As the researchers write, 'the only thing proven to prevent foreclosure is getting so expensive that it is causing foreclosures.' First Street isn't focused on policy implications in the research report, Porter said, but given the political climate in Washington and the threats to many of the agencies that help Americans rebuild in the aftermath of disasters, it's hard not to draw conclusions. 'Any reduction in resources is only going to exacerbate the problems that we're seeing today,' he said. This article originally appeared on USA TODAY: Home insurance protects against climate change. But millions miss out.
