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52 | TH E M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T In the Line of Fire Here's what a new report revealed after analyzing the impact of wildfires on housing. I f the hurricane season is underway on the East Coast, the West is fighting its own set of natural disasters that strike around this time of the year—wildfires. Recent data by CoreLogic revealed that more than 500,000 acres were burned by wildfires during the first six months of 2019. According to the report, the estimated value of property loss associated with the Camp Fire in California in late 2018 is around $11 billion to $13 billion, and the Tubbs Fire in October 2017 had losses between $5 billion to $7 billion. The Camp Fire destroyed near- ly 20% of single-family housing in Butte County, and the Tubbs Fire burned 6% of single-family housing in the city of Santa Rosa, California. CoreLogic revealed that within the first three months of the natural disasters, mortgage default spiked. The serious delinquency rate on mortgages in Sonoma County increased 50% and Butte County saw a 70% jump. However, rent and price growth accelerated in both Sonoma and Butte Counties after the disaster, with prices jumping 4% to 7% points higher than the statewide average. Natural disasters also impact home prices, housing stock, and the increased demand for shelter. While home sales in Butte County increased 50% during Q1 2019 from a year earlier, sales fell 19% in the rest of the state. Sales also fell in Paradise, California, an area where wildfires caused mass destruction last year. With that being said, CoreLogic noted that the acreage burned so far in 2019 is well below the 10- year average, year-to-date. "Thanks to a 50-year low in unemployment, rising home prices and responsible underwriting, the U.S. overall delinquency rate is the lowest in more than 20 years," Frank Nothaft, Chief Economist for CoreLogic. "However, a number of metros that suffered a natural disaster or economic decline contradict this national trend. For example, in the wake of the 2018 California Camp Fire, the serious delinquency rate in the Chico, California, metro area this April was 21% higher than one year ago." When Disaster Strikes Recent data has analyzed the impact of Hurricane Barry on housing in Louisiana. N ew data indicates that Hurricane Barry caused between $500 million and $900 million in flood and wind losses. According to CoreLogic, flood loss for resi- dential and commercial properties in Louisiana is estimated to be between $200 million and $400 million, and insured flood loss from private insurers is estimated at less than $100 million. Insured residential and com- mercial flood loss covered by the National Flood Insurance Program (NFIP) is estimated to be between $100 million and $200 million, but 20% of residential flood loss is uninsured. CoreLogic said that uninsured flood loss is estimated to be approximately $100 million, while approximately 500,000 total residential and com- mercial property policies are in force through the NFIP. Wind losses, not covered by the NFIP, are expected to total between $300 million and $500 million the data suggested. Insured flood and wind losses, excluding the NFIP losses, are between $300 million and $600 million. The data indicated that many homeowners may be unaware that flood insurance is a premium provided through the NFIP, rather than an included feature in their homeowner's insurance. For example, wind damage is covered in standard insurance and flood is a separate coverage which is not mandatory outside the designated Special Flood Hazard Areas (SFHAs). A recent survey by InsuranceQuotes.com attempted to shed some light on what homeowners should know when it comes to their insurance policy, including flood insurance. According to the NFIP, a flood is "a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area or of two or more properties (at least one of which is your property) from overflow of inland or tidal waters, from unusual and rapid accumulation or runoff of surface waters from any source, or from mudflow." The NFIP's availability to homeowners may improve in coming months, especially for those impacted by natural disas- ters. Recently, the House Financial Services Committee unanimously approved two bills to reform and reauthorize the NFIP. H.R. 3111 would bring improvements to the NFIP appeals process, ac- countability, and transparency of claims process in the aftermath of Hurricane Sandy, and H.R. 3167 would reauthorize the NFIP for five years and includes numerous reforms to increase affordability, mapping, and modernization. The data indicated that many homeowners may be unaware that flood insurance is a premium provided through the NFIP, rather than an included feature in their homeowner's insurance.