Marketing, Processing, Servicing Tools; STRATMOR on Revenue Growth; FHA, EPDs, and Disasters

You may not believe in climate change, but your insurance company and mortgage servicer certainly do. It is a fact that warmer air can hold more moisture, and a new peer-reviewed study published in the Journal of Catastrophe Risk and Resilience found that insured losses from hurricanes could rise 50 percent if global atmospheric warming hits the 2 degrees Celsius threshold. A lot of those losses come from the areas affected by hurricanes expanding well northward along the Eastern Seaboard, with places that had been considered relatively safe from the monster storms suddenly now well in range of tropical storms. Lenders are well aware that Florida still sees the largest absolute increase (its already high losses are projected to rise another 44 percent if the 2-degree threshold is broken) but areas that had relatively low risks are poised to see a higher percentage increase. New York’s insured hurricane losses are projected to rise 64 percent, and Massachusetts’ poised to rise 70 percent annually. (Today’s podcast can be found here).

Natural Disaster Updates

A disaster declaration from FEMA triggers procedures and polices from lenders and servicers. I haven’t heard anyone argue that storm damage dollar amounts are decreasing. Who’s doing what?

Flooding in Texas (DR-4879-TX), have a mortgage closing date before the Incident Period start date of July 2, 2025, and become EPDs between August 1, 2025, and January 31, 2026.

FHA issued a limited waiver of its policy regarding Early Payment Default (EPD) review requirements found in the Single Family Housing Policy Handbook 4000.1 (Handbook 4000.1), Sections V.A.3.a.i.(C) and V.A.3.a.iv.(B)(2). This waiver applies to FHA-insured mortgages located in the Presidentially-Declared Major Disaster Area (PDMDA) for the recent Texas severe storms, straight-line winds and flooding. The current policy is being waived for FHA-insured mortgages that are in the PDMDA for Texas Severe Storms, Straight-Line Winds and

On 7/6/2025, with DR-4879, FEMA declared federal disaster aid with individual assistance to Kerr county Texas affected by severe storms, straight-line winds, and flooding from 7/2/2025, and continuing. On 7/10/2025, with Amendment No. 1 to DR-4879, FEMA declared federal disaster aid with individual assistance has been made available to 5 additional Texas counties affected by severe storms, straight-line winds, and flooding from 7/2/2025, and continuing.

Capital Markets

Recent economic data paints a mixed picture of momentum. Imports are slowing

sharply, with inbound container volumes at major U.S. ports falling for the second consecutive month, highlighting the growing impact of Trump’s trade war. New home sales rebounded in June, but the broader market remains sluggish due to high mortgage rates, poor affordability, and rising insurance costs. While listings are up in booming Sunbelt metros, putting mild downward pressure on prices, they remain constrained in much of the rest of the country.

Without much in the way of news to open the week, we can look ahead to later this week, which is expected to show early July business sentiment surveys (PMIs) ticked higher on optimism around the 2026 tax cut, though they also suggest that input cost inflation continues to run hotter than in recent years. Durable goods orders likely fell back in June after a temporary boost from aircraft demand in May.

Today’s economic calendar kicked off with Philadelphia Fed non-manufacturing surveys for July, and will be followed by Redbook same store sales, Richmond Fed manufacturing and services for July, some short-duration Treasury auctions, and remarks from Fed Chair Powell and Fed Vice Chair for Supervision Bowman. Today is 48-hour notification for Class D MBS. We begin the day with Agency MBS prices unchanged from Monday’s close, the 2-year yielding 3.85, and the 10-year yielding 4.37 after closing yesterday at 4.37 percent.

Source: Rob Chrisman, Tuesday, July 22 2025, 11:53AM

Link: https://www.mortgagenewsdaily.com/opinion/pipelinepress-07222025