Latest news with #foreclosures
Globe and Mail
7 days ago
- Business
- Globe and Mail
ICE First Look at Mortgage Performance: Delinquencies Trend Slightly Higher in June as Foreclosure Activity Continues to Rise off Pandemic-Era Lows
ICE Mortgage Technology, neutral provider of a robust end-to-end mortgage platform and part of Intercontinental Exchange, Inc. (NYSE: ICE), today released its June 2025 ICE First Look, which shows that while overall mortgage payment performance remains strong, delinquencies rose on a monthly basis while foreclosures trended notably higher year over year (YoY). Key takeaways from the ICE First Look, which reports on month-end delinquency, foreclosure and prepayment statistics sourced from ICE's loan-level database, include: The national delinquency rate rose by 15 basis points (bps) from May to 3.35% driven by early-stage delinquencies. FHA delinquencies, which tend to experience more seasonality, rose by 41 bps in the month, hitting their highest June level since 2013, excluding the 2020-2021 pandemic-era impact. Serious delinquencies (SDQs) – loans 90+ days past due but not in foreclosure – held steady but are up +8% (35K) YoY, with FHA loans now accounting for +51% of all SDQs nationwide. Foreclosure activity continues to rise off pandemic-era lows with the share of loans in active foreclosure up +10% from the same time last year. Foreclosure starts and sales both rose YoY in each of the past four months. Prepayment activity, measured in single month mortality, slipped by 6 bps to 0.65% on higher rates, although it remains up +22% from the same time last year. Data as of June 30, 2025 Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 3.35% Month-over-month change: 4.74% Year-over-year change: -3.80% Total U.S. foreclosure pre-sale inventory rate: 0.38% Month-over-month change: 0.20% Year-over-year change: 9.90% Total U.S. foreclosure starts: 31,000 Month-over-month change 9.68% Year-over-year change: 36.50% Monthly prepayment rate (SMM): 0.65% Month-over-month change: -8.74% Year-over-year change: 21.91% Foreclosure sales: 6,300 Month-over-month change: -9.70% Year-over-year change: 18.17% Number of properties that are 30 or more days past due, but not in foreclosure: 1,834,000 Month-over-month change: 90,000 Year-over-year change: -39,000 Number of properties that are 90 or more days past due, but not in foreclosure: 466,000 Month-over-month change: 0 Year-over-year change: 35,000 Number of properties in foreclosure pre-sale inventory: 208,000 Month-over-month change: 1,000 Year-over-year change: 22,000 Number of properties that are 30 or more days past due or in foreclosure: 2,042,000 Month-over-month change: 91,000 Year-over-year change: -17,000 Top 5 States by Non-Current* Percentage Louisiana: 7.78% Mississippi: 7.63% Alabama: 5.73% Indiana: 5.25% Arkansas: 5.23% Bottom 5 States by Non-Current* Percentage California: 2.23% Montana: 2.20% Colorado: 2.14% Idaho: 2.01% Washington: 2.00% Top 5 States by 90+ Days Delinquent Percentage Mississippi: 1.93% Louisiana: 1.87% Alabama: 1.45% Arkansas: 1.33% Georgia: 1.31% Top 5 States by 12-Month Change in Non-Current* Percentage Maine: -3.31% New York: -3.67% Rhode Island: -3.35% Nebraska: -3.33% Hawaii: -2.31% Bottom 5 States by 12-Month Change in Non-Current* Percentage Florida: 4.21% Georgia: 5.05% Montana: 2.20% Arizona: 3.05% Utah: 2.96% *Non-current totals combine foreclosures and delinquencies as a percent of active loans in that state. Notes: 1) Totals are extrapolated based on ICE's loan-level database of mortgage assets. 2) All whole numbers are rounded to the nearest thousand, except foreclosure starts and sales, which are rounded to the nearest hundred. The company will provide a more in-depth review of this data in its monthly Mortgage Monitor report, which includes an analysis of data supplemented by detailed charts and graphs that reflect trend and point-in-time observations. The Mortgage Monitor report will be available online at by August 11, 2025. For more information about gaining access to ICE's loan-level database, please send an email to ICE-MortgageMonitor@ About the ICE First Look ICE maintains the nation's leading repository of loan-level residential mortgage data and performance information – which covers the majority of the U.S. market – including tens of millions of loans across the spectrum of credit products and more than 230 million historical records. In addition, the company maintains a robust public property records database that covers 99.9% of the U.S. population and households from more than 3,100 counties. ICE's research experts carefully analyze this data to produce the First Look, a monthly summary of month-end delinquency, foreclosure and prepayment statistics. About Intercontinental Exchange Intercontinental Exchange, Inc. (NYSE: ICE) is a Fortune 500 company that designs, builds and operates digital networks that connect people to opportunity. We provide financial technology and data services across major asset classes helping our customers access mission-critical workflow tools that increase transparency and efficiency. ICE's futures, equity, and options exchanges – including the New York Stock Exchange – and clearing houses help people invest, raise capital and manage risk. We offer some of the world's largest markets to trade and clear energy and environmental products. Our fixed income, data services and execution capabilities provide information, analytics and platforms that help our customers streamline processes and capitalize on opportunities. At ICE Mortgage Technology, we are transforming U.S. housing finance, from initial consumer engagement through loan production, closing, registration and the long-term servicing relationship. Together, ICE transforms, streamlines and automates industries to connect our customers to opportunity. Trademarks of ICE and/or its affiliates include Intercontinental Exchange, ICE, ICE block design, NYSE and New York Stock Exchange. Information regarding additional trademarks and intellectual property rights of Intercontinental Exchange, Inc. and/or its affiliates is located here. Key Information Documents for certain products covered by the EU Packaged Retail and Insurance-based Investment Products Regulation can be accessed on the relevant exchange website under the heading 'Key Information Documents (KIDS).' Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 – Statements in this press release regarding ICE's business that are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of additional risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see ICE's Securities and Exchange Commission (SEC) filings, including, but not limited to, the risk factors ICE's Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the SEC on February 6, 2025.
Forbes
13-07-2025
- Business
- Forbes
Mortgage Delinquencies Are Exploding: What Smart Investors See Coming
RICHMOND, CA - JUNE 13: A sign is posted in front of a foreclosed home for sale June 13, 2008 in ... More Richmond, California. Nationwide home foreclosures filings spiked nearly 50 percent in May compared to one year ago and up 7 percent from April of this year. 261,255 homes reported foreclosure-related filings in May, compared to 176,137 one year ago. (Photo by) The national delinquency rate is only 3.2% on paper. But things are different behind the scenes. VantageScore and Investopedia both say that what lenders are currently witnessing is true: early delinquencies are rising faster than any other type of consumer credit. The stress is real, it's coming on early, and it's going faster than most investors think. That one sentence reframed the macro picture. It confirmed what many investors have felt beneath the surface: this isn't just about high interest rates or inflation fatigue; it's about behavioral collapse. The U.S. consumer is no longer just stretched. They're snapping. For all the talk about a 'soft landing,' this is a hard truth. We're witnessing the early stages of a credit deterioration cycle that markets are failing to price in. It's showing up first in subprime auto, now in mortgages, and next it may bleed into broader consumer credit and regional banks. This isn't a doom prediction. It's a recognition of inflection points I've spent my career identifying. The signs are flashing red for sectors exposed to leveraged consumers and real estate-linked lending. Investors need to ask: where is the risk hiding? Which companies are fragile? And more importantly, which ones are built to survive this storm? The ripple effects of a 200% spike in mortgage delinquencies could be significant for equities, especially as we look toward 2026. Those chasing high-beta names and ignoring balance sheet quality might be walking into the next drawdown. What's Really Driving The Spike in Mortgage Delinquencies? A 200 percent increase in mortgage delinquencies in just six months is not a statistical anomaly. It is the result of three powerful forces converging beneath the surface of the economy. Investors who ignore them are missing early warnings. The first is interest rate fatigue. After two years of relentless tightening by the Federal Reserve, the impact is finally hitting home. Variable rate resets on mortgages and home equity lines of credit are taking a toll. Credit card balances are ballooning. For many Americans, homeownership is no longer just unaffordable to achieve. It is becoming unaffordable to maintain. Second, there is the pandemic overhang and the disappearance of so-called excess savings. That story has ended. Consumers have already spent on their reserves trying to maintain lifestyle spending during periods of high inflation. Now, the cushion is gone. What remains is a fragile financial position with no room for error. Third, wage stagnation among lower income earners is compounding the problem. Nominal wages may have increased, but real wage growth for most working Americans has failed to keep pace with the cost of living. Prices have climbed. Paychecks have not. Every expense now feels heavier. The margin of error no longer exists. Mortgage delinquencies are not a blip in the data. They are a leading indicator. They are the first crack in a leveraged economy. And that matters for every investor trying to assess risk as we head into 2026. The Credit Cycle Always Starts Quietly It's easy to overlook how credit problems really begin. On the first day, they don't make the news. It always starts quietly. A few lenders tighten up on new credit issuance. Then, small losses begin to tick higher. Next, earnings guidance from banks starts to shift. After that, markets begin waking up to the reality that a credit downturn is underway. This is not alarmism. It is pattern recognition. We have seen this sequence before, in 2007, in 2015, and again in early 2020. Each time, there was a belief that the economy was stable, and the consumer was resilient. And each time, the real deterioration began not at the edges, but in the middle. It doesn't take a collapse in subprime to trigger broader concerns. Often, the first real cracks appear in prime borrowers who were stretched thin, quietly falling behind while headlines focus on everything else. Investors who wait for the obvious signs are usually too late. The time to pay attention is when the signals are faint but consistent. Right now, those signals are getting louder. when the signals are faint but consistent. Right now, those signals are getting louder. Why Markets Haven't Priced In Mortgage Defaults Markets are still fixated on tech earnings, inflated AI valuations, and the idea of a soft landing. That optimism may hold for now, but it becomes fragile the moment cracks spread beyond the housing market. The risk is in the timing. Mortgage delinquencies are a lagging indicator. By the time they appear in earnings calls or data sets, the damage has already begun. The real signal is behavior. It shows up when consumers start missing smaller payments first, credit cards, car loans, utility bills long before they default on a mortgage. If middle income borrowers are falling behind on their homes, you can assume the rest of their financial life is already under strain. Despite this, the market remains complacent. This pricing disconnect is not just curious. It is dangerous. When asset prices ignore early signs of consumer stress, they set up for sharp repricing. The smarter move is to position now, while others are still distracted by headlines and hype. Who Gets Hurt First? Let's get specific. A surge in mortgage delinquencies does not stay isolated. It bleeds into sectors that are structurally exposed to consumer credit stress. The following areas are especially vulnerable. When delinquencies rise, the pain does not stay in one pocket. It spreads. Investors need to be ahead of that curve, not reacting to it. Where The Opportunity Lies Most investors either panic or freeze when cracks begin to show. But disciplined investors know that dislocation creates opportunity—if you know where to look and what signals to track. At The Edge, we are actively watching three key areas where volatility could unlock real upside. 1. Special Situation Plays Disruption often forces companies to streamline. For some well-capitalized lenders, that could mean divesting non-core operations or spinning off riskier divisions to focus on high-quality credit or commercial lending. These restructurings are rarely well understood at the start. But they often create mispricing's when market participants fail to re-rate the remaining business. The telltale signs are in the filings. Look for changes in segment disclosure, restructuring charges, or management commentary that hints at strategic realignment. Breakups are not just governance stories—they are often the fastest path to unlocking hidden value. 2. Deep Value With A Catalyst Valuation alone is not enough. A stock that looks cheap may stay cheap unless something forces a shift. Take Synchrony Financial. On the surface, it trades at a discount. But without a catalyst such as activist interest, M&A potential, or insider accumulation, the market has little reason to reprice the risk. We are not just hunting for discounts. We are hunting for change, backed by signals that behavior inside the company or on the shareholder register is about to shift. 3. Counter-Cyclical Buys Consumer stress does not hurt everyone. In fact, some business models thrive in these conditions. Companies that operate in credit recovery, debt collection, or financial tech platforms designed to manage delinquencies could see a tailwind. The same goes for discount retailers with strong balance sheets and pricing power. These are not hope trades. They are behavioral trades. When the consumer tightens spending, the beneficiaries are often hiding in plain sight. The key is knowing which names have real leverage to that shift and which are simply cyclical placeholders. The Smart Investor's Playbook At The Edge, we approach markets with a clear framework. In environments like this, the best returns come not from reacting to headlines, but from reading signals before they turn into narratives. Here's how we think about it: This is not a time to be passive. It is a time to be process-driven, not emotionally reactive. Investors with a disciplined approach to signal tracking will be the ones ahead of the market, not chasing it. The Cracks Come Before The Collapse Most investors wait for a chart to break before they take action and they will wait for sure with mortgage defaults, as no one wants to believe it. But the smartest ones look for cracks before they spread. Lending standards are tightening. Defaults are rising. And the pressure is not at the edges—it is building in the middle. The market may still be celebrating new highs in the S&P 500. That celebration can vanish quickly if the consumer buckles under the weight of stagnant wages, high rates, and rising mortgage defaults. Behavior tells the story first. The author has clarified certain terms post initial publication.
Forbes
12-07-2025
- Business
- Forbes
Mortgage Defaults Are Exploding: What Smart Investors See Coming
RICHMOND, CA - JUNE 13: A sign is posted in front of a foreclosed home for sale June 13, 2008 in ... More Richmond, California. Nationwide home foreclosures filings spiked nearly 50 percent in May compared to one year ago and up 7 percent from April of this year. 261,255 homes reported foreclosure-related filings in May, compared to 176,137 one year ago. (Photo by) Last week, I got off the phone with the CEO of one of the largest mortgage lenders in the United States. What he told me wasn't in any press release or CNBC segment. It wasn't in the Fed minutes or Wall Street research notes. It was quietly devastating. 'Mortgage defaults are up over 200% in the last six months.' That one sentence reframed the macro picture. It confirmed what many investors have felt beneath the surface: this isn't just about high interest rates or inflation fatigue; it's about behavioral collapse. The U.S. consumer is no longer just stretched. They're snapping. For all the talk about a 'soft landing,' this is a hard truth. We're witnessing the early stages of a credit deterioration cycle that markets are failing to price in. It's showing up first in subprime auto, now in mortgages, and next it may bleed into broader consumer credit and regional banks. This isn't a doom prediction. It's a recognition of inflection points I've spent my career identifying. The signs are flashing red for sectors exposed to leveraged consumers and real estate-linked lending. Investors need to ask: where is the risk hiding? Which companies are fragile? And more importantly, which ones are built to survive this storm? The ripple effects of a 200% spike in mortgage delinquencies could be significant for equities, especially as we look toward 2026. Those chasing high-beta names and ignoring balance sheet quality might be walking into the next drawdown. What's Really Driving The Spike in Mortgage Defaults? A 200 percent increase in mortgage delinquencies in just six months is not a statistical anomaly. It is the result of three powerful forces converging beneath the surface of the economy. Investors who ignore them are missing early warnings. The first is interest rate fatigue. After two years of relentless tightening by the Federal Reserve, the impact is finally hitting home. Variable rate resets on mortgages and home equity lines of credit are taking a toll. Credit card balances are ballooning. For many Americans, homeownership is no longer just unaffordable to achieve. It is becoming unaffordable to maintain. Second, there is the pandemic overhang and the disappearance of so-called excess savings. That story has ended. Consumers have already spent on their reserves trying to maintain lifestyle spending during periods of high inflation. Now, the cushion is gone. What remains is a fragile financial position with no room for error. Third, wage stagnation among lower income earners is compounding the problem. Nominal wages may have increased, but real wage growth for most working Americans has failed to keep pace with the cost of living. Prices have climbed. Paychecks have not. Every expense now feels heavier. The margin of error no longer exists. Mortgage delinquencies are not a blip in the data. They are a leading indicator. They are the first crack in a leveraged economy. And that matters for every investor trying to assess risk as we head into 2026. The Credit Cycle Always Starts Quietly It's easy to overlook how credit problems really begin. On the first day, they don't make the news. It always starts quietly. A few lenders tighten up on new credit issuance. Then, small losses begin to tick higher. Next, earnings guidance from banks starts to shift. After that, markets begin waking up to the reality that a credit downturn is underway. This is not alarmism. It is pattern recognition. We have seen this sequence before, in 2007, in 2015, and again in early 2020. Each time, there was a belief that the economy was stable, and the consumer was resilient. And each time, the real deterioration began not at the edges, but in the middle. It doesn't take a collapse in subprime to trigger broader concerns. Often, the first real cracks appear in prime borrowers who were stretched thin, quietly falling behind while headlines focus on everything else. Investors who wait for the obvious signs are usually too late. The time to pay attention is when the signals are faint but consistent. Right now, those signals are getting louder. when the signals are faint but consistent. Right now, those signals are getting louder. Why Markets Haven't Priced In Mortgage Defaults Markets are still fixated on tech earnings, inflated AI valuations, and the idea of a soft landing. That optimism may hold for now, but it becomes fragile the moment cracks spread beyond the housing market. The risk is in the timing. Mortgage delinquencies are a lagging indicator. By the time they appear in earnings calls or data sets, the damage has already begun. The real signal is behavior. It shows up when consumers start missing smaller payments first, credit cards, car loans, utility bills long before they default on a mortgage. If middle income borrowers are falling behind on their homes, you can assume the rest of their financial life is already under strain. Despite this, the market remains complacent. This pricing disconnect is not just curious. It is dangerous. When asset prices ignore early signs of consumer stress, they set up for sharp repricing. The smarter move is to position now, while others are still distracted by headlines and hype. Who Gets Hurt First? Let's get specific. A surge in mortgage delinquencies does not stay isolated. It bleeds into sectors that are structurally exposed to consumer credit stress. The following areas are especially vulnerable. When delinquencies rise, the pain does not stay in one pocket. It spreads. Investors need to be ahead of that curve, not reacting to it. Where The Opportunity Lies Most investors either panic or freeze when cracks begin to show. But disciplined investors know that dislocation creates opportunity—if you know where to look and what signals to track. At The Edge, we are actively watching three key areas where volatility could unlock real upside. 1. Special Situation Plays Disruption often forces companies to streamline. For some well-capitalized lenders, that could mean divesting non-core operations or spinning off riskier divisions to focus on high-quality credit or commercial lending. These restructurings are rarely well understood at the start. But they often create mispricing's when market participants fail to re-rate the remaining business. The telltale signs are in the filings. Look for changes in segment disclosure, restructuring charges, or management commentary that hints at strategic realignment. Breakups are not just governance stories—they are often the fastest path to unlocking hidden value. 2. Deep Value With A Catalyst Valuation alone is not enough. A stock that looks cheap may stay cheap unless something forces a shift. Take Synchrony Financial. On the surface, it trades at a discount. But without a catalyst such as activist interest, M&A potential, or insider accumulation, the market has little reason to reprice the risk. We are not just hunting for discounts. We are hunting for change, backed by signals that behavior inside the company or on the shareholder register is about to shift. 3. Counter-Cyclical Buys Consumer stress does not hurt everyone. In fact, some business models thrive in these conditions. Companies that operate in credit recovery, debt collection, or financial tech platforms designed to manage delinquencies could see a tailwind. The same goes for discount retailers with strong balance sheets and pricing power. These are not hope trades. They are behavioral trades. When the consumer tightens spending, the beneficiaries are often hiding in plain sight. The key is knowing which names have real leverage to that shift and which are simply cyclical placeholders. The Smart Investor's Playbook At The Edge, we approach markets with a clear framework. In environments like this, the best returns come not from reacting to headlines, but from reading signals before they turn into narratives. Here's how we think about it: This is not a time to be passive. It is a time to be process-driven, not emotionally reactive. Investors with a disciplined approach to signal tracking will be the ones ahead of the market, not chasing it. The Cracks Come Before The Collapse Most investors wait for a chart to break before they take action and they will wait for sure with mortgage defaults, as no one wants to believe it. But the smartest ones look for cracks before they spread. The CEO I spoke with was not panicking. But he was direct. Lending standards are tightening. Defaults are rising. And the pressure is not at the edges—it is building in the middle. The market may still be celebrating new highs in the S&P 500. That celebration can vanish quickly if the consumer buckles under the weight of stagnant wages, high rates, and rising mortgage defaults. Behavior tells the story first.
Yahoo
11-07-2025
- Business
- Yahoo
Foreclosures climb in New Jersey; these counties saw the sharpest rise: report
Somerset County saw the sharpest rise in first-time foreclosures in the 12 New Jersey counties in the metropolitan New York City area during the second quarter of 2025, according to a study by Property Shark. The number of first-time foreclosures in Somerset County grew by 54% in a year-over-year rise. However, Somerset had the third smallest number of foreclosures in the study, 37. Overall, the study found the number of first-time foreclosures in the 12 northern, central and shore New Jersey counties in the metropolitan area totaled 804. That was a 23% year-over-year increase after nine quarters of nearly consecutive declines. Only two counties, Union and Passaic, showed declines. More: Rising cost of homeowners insurance is scaring away millions of Americans Middlesex showed the smallest increases in cases, 6%. In Hunterdon, there were only two additional cases, the smallest number in the study. Though Hunterdon had the lowest number of first-time foreclosures, 21, that was a three-year high, according to the study. Essex: 139, 28%. Ocean: 118, 13%. Bergen: 109, 30% Monmouth: 82, 44%. Union: 58, -8%. Middlesex: 55, 6%. Morris: 54, 50%. Hudson: 52, 49%. Passaic: 46, -2%. Somerset: 37, 54% Sussex: 41, 37%. Hunterdon: 21, 11%. Email: mdeak@ This article originally appeared on NJ foreclosures up 23% since summer 2024, report says
CBS News
19-05-2025
- Business
- CBS News
Climate change could drive surge in foreclosures and lender losses, new study finds
Extreme weather linked to climate change could spell financial ruin for many American homeowners and lead to billions in losses for lenders, a new study finds. First Street, a research firm that studies the impact of climate change, projects in an analysis released Monday that foreclosures across the U.S. caused by flooding, wind and other weather-related incidents could soar 380% over the next 10 years. By 2035, climate-driven events could account for up to 30% of all foreclosures by 2035, up from roughly 7% this year. Low- to moderate-income households are particularly vulnerable to the effect of severe weather on their homes, First Street noted. Much of Americans' wealth is tied up in the value of their properties. A cascade of foreclosures, driven by the mounting costs of repairs and rising insurance premiums stemming from extreme weather, wouldn't only hurt homeowners. First Street estimates lenders will lose $1.2 billion a year in 2025 — and up to $5.4 billion in 10 years — as they are forced to absorb the cost of mortgage defaults. Such losses represent the "hidden risks" of climate change that lenders often fail to account for in their underwriting practices, Jeremy Porter, head of climate implications at First Street, told CBS MoneyWatch. Lenders consider factors including a borrower's income, debt and credit score in issuing mortgages, but not the potential impact of extreme weather on a property or how it could raise premiums. First Street also looked at how indirect factors, like rising insurance premiums, are already shaping foreclosure trends. For every 1% increase in insurance costs, the firm projects a roughly 1% increase in the foreclosure rate nationwide. The findings comes as insurers are jacking up the cost of homeowners policies and in some cases exiting markets around the U.S. altogether, leading to spottier coverage in disaster-prone areas like California. That could leave more individual homeowners on the hook for damage from extreme weather. First Street said integrating climate risk into loan assessments could help lenders – and homeowners – be better prepared for weather-related disasters. But it could also tighten lending conditions, Porter said, putting potential homebuyers at a disadvantage. "It's going to increase the price of homes. It's going to increase interest rates," he said. Where climate foreclosures could rise According to First Street, the communities around the U.S. at greatest risk for climate-related foreclosures in the years to come are densely populated areas with high property values and large numbers of underinsured homeowners. That includes coastal areas vulnerable to storm surge and hurricane winds. For example, Florida's Duval County in the northeastern corner of the state, home to the city of Jacksonville, could see up to $60 million in credit losses resulting from 900 foreclosures in a "severe weather" year, according to CBS MoneyWatch's analysis of First Street's data Florida is home to 8 of the top 10 counties with the highest projected credit losses due to extreme weather, the data shows. Louisiana, California and swaths of the northeast are also projected to see high climate-related mortgage losses this year. But the impact won't just be felt in coastal areas: First Street also expects extreme rainfall and riverine flooding to drive up foreclosures in inland states. "We do expect foreclosures to rise in those areas because the predominant driver is a lack of insurance," Porter said. According to First Street, flooding events in particular is likely to drive up foreclosure rates, as gaps in insurance coverage put more people at risk of defaulting on their mortgages. Unlike homeowners insurance, flood insurance is only required for people who have federally-backed mortgages in FEMA's Special Flood Hazard Areas. As of August 2023, that amounted to roughly 3.1 million policies, according to National Flood Insurance Program data. But far more people could be at risk. FEMA's 100-year flood zone maps include just under 8 million properties. But First Street estimates that nearly 18 million homes are at risk of flooding. That's because while the agency takes flooding from major river channels and coastal storm surge into account for its maps, it does not consider extreme precipitation, Porter said. "We already know that about half the people with significant flood risk aren't mapped into [FEMA's] Special Flood Hazard Area," he said. "So it leads to a state where we have a lot of underinsurance across the country, in particular from flooding." Meanwhile, whether or not you live in an official FEMA flood zone can make a difference when it comes to the likelihood of foreclosure, First Street found. That's because people outside flood zones often lack insurance. "If you don't protect yourselves, then when the event does occur it's completely on you. You end up having to pay out of pocket and you may go into foreclosure," Porter said. In an analysis of 29 historical flood events from 2002-2019, First Street found that damaged properties outside of those FEMA-designated zones experienced foreclosure increases at an average of 52% higher than properties inside the zones. FEMA did not respond to a request for comment on if and how it plans to update its flood maps. According to one estimate by the Association of State Floodplain Managers, it could take up to $11.8 billion to complete updated flood mapping in the U.S. Mary Cunningham Mary Cunningham is a reporter for CBS MoneyWatch. Before joining the business and finance vertical, she worked at "60 Minutes," and CBS News 24/7 as part of the CBS News Associate Program. contributed to this report.
