Hurricane Laura, a Category 4 storm when it struck Louisiana, is poised to affect over 28,000 pending mortgage transactions in that state, as well as Texas and Mississippi. Combined, those loans, being originated by more than 180 different lenders, have an estimated value of $6.8 billion.
That’s according to ClosingCorp
, a provider of residential real estate closing cost data and technology for the mortgage and real estate services industries. The firm based its estimate on “in-flight” mortgage applications in 83 counties and parishes that are due to close between now and the end of November. ClosingCorp has more than 30% national market share, and its adoption by 18 of the country’s 25 largest banks and mortgage companies, thus providing it insight into regional lending activity.
CoreLogic says Laura has the potential
to impact 1.1 million homes with over $265 billion in reconstruction cost value. While the storm has moved slightly away from Houston, storm surge is expected to heavily impact the Lake Charles and Jennings metro areas. Laura is the first major hurricane of the 2020 Atlantic season.
ClosingCorp says Texas is the state with the most mortgage transactions at risk ($4.1 billion), followed by Louisiana ($2.5 billion) and Mississippi ($171 million). The counties in each state with the most exposure are:
- Harris County, TX, which includes Houston and part of Galveston, with 9,000 mortgages valued at $2.3 billion
- Orleans Parrish, LA, which includes New Orleans, with 1,367 transactions valued at $391 million
- Harrison County MS, which includes Biloxi, with 308 mortgages valued at $63 million
While some of the properties are at low or moderate risk of damage, storm surge can expand to adjacent areas and cause significant damage. In many cases, new inspections and often new appraisals will be required before the mortgages can be approved and the sales completed. In some instances, the damage will result in significant delays or cause deals to fall apart.