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Drought, hurricanes, and tornado shifts add new risk for US mortgage servicing
Mortgage servicers face higher exposure as tornado activity in places like Illinois rose 45.6% in the 2020 to 2025 period versus 2000 to 2025, while Kansas averaged 49% lower over the same comparison window.
Mortgage News Daily says the US housing and mortgage industry is increasingly tracking extreme weather risk, with the North Atlantic hurricane season so far running light for homeowners, servicers, lenders, and insurers, while other regions are seeing severe tornado patterns.
The outlet reports that “Tornado Alley” appears to be shifting eastward and into more populated areas, citing Illinois as leading all states in tornado activity with 220 confirmed tornadoes, and noting record high numbers in Indiana and Wisconsin.
Mortgage servicers, the publication adds, are paying attention to how damage monitoring has historically been more advanced in insurance than in mortgage operations, and it points to an Illinois annual tornado report average that rose 45.6% in the 2020 to 2025 period compared with 2000 to 2025.
Mortgage News Daily also links affordability stress to downstream risk after origination, saying repurchase risk can rise when borrowers are stretched and there is less margin for file errors, and it highlights verification tools that claim to improve accuracy and speed.