Impact of Climate Change on US Residential Mortgage Servicing

Whether or not climate change is real and represents an existential threat and, if so, regardless of the reasons for it, the number and severity of domestic natural disasters appear to be on the rise. And, if you are a mortgage servicer dealing with disaster-related damage to mortgaged properties and the related mortgagor defaults, it probably does not matter why. This Legal Update discusses how the servicer bears the risk of loss on government-insured or -guaranteed residential mortgage loans resulting from borrower defaults arising out of natural disasters and that exceed property insurance proceeds and the implications for the market if the upward trend in natural disasters in this country continues.