Post Disaster Property Inspections

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picture of home with roof damage from storm

November 29, 2021 | By Rick Chirdon, Chief Appraiser

Everyone talks about the weather. In fact, it might be the most popular topic of small talk, often considered an easy conversation starter and rather mundane. But I believe it should be a much bigger topic than just small talk.

You can’t help but notice, over the past few years, that the news is filled with natural disasters that have wreaked havoc throughout the U.S. and worldwide. The latest shocking episode in Egypt, with flooding leading to hundreds of scorpion stings, sounds like something out of a thriller movie.

We have certainly all had our share of natural disasters, leaving communities devastated and properties damaged.  

Extreme weather damage

From hurricanes to tornados, earthquakes, wildfires, extreme rain and flooding, high winds, heavy snow damage, and yes, even volcanic eruptions, we’ve seen it all. In 2020 alone, damages from natural disasters hit $210 billion worldwide – hitting a new record for the highest amount ever recorded.

chart showing record high weather damage worldwide in 2020

One example of this was wildfires. 2020 was the most active year on record in the US for wildfires – resulting in the largest wildfire in California’s history, as well as 3rd and 4th largest, and five of the Top 10.

map of united states wildfires in 2020

The disasters that have occurred in 2021 have been just as intense and are not over yet. The trend for natural disasters does not seem to be letting up, and if anything, is intensifying.

Natural disasters are a topic of concern that has a direct effect on mortgage lending and loan services. Insurance claims aside, mortgage lenders have made a loan that is secured by the property mortgaged. These loans range up to 30 years and put the lender at risk if a disaster damages the subject property, reducing its value during the lending transaction and/or throughout the loan term.

The Importance of Disaster Inspections

Post-disaster inspections (or FEMA inspections) provide a necessary layer of protection for lenders. Oftentimes, an appraisal is completed on a property, then a storm may occur. Even though an appraisal was just completed, an inspection must be ordered to ensure the property has not been damaged.

If the property is damaged, you won’t want to go through with the loan until repairs have been made; protecting you from risks associated with storm damage – like leaking roofs. After everything has been repaired, a completion inspection or a whole new appraisal may be needed.

If you skip the disaster home inspection and make a loan on a property that is damaged, there is a good chance the mortgage may not be properly secured, and the borrower may default – leaving you with an asset that can quickly turn into a money pit.

No matter the situation, lenders will have properties in their portfolios that are affected by natural disasters. After a disaster has occurred, only a “boots on the ground” with an onsite inspection can validate and verify the subject property’s current condition.  

Why choose a Disaster Inspection?

Unlike a typical home inspection, which provides information on the condition of the property as a whole, a post-disaster inspection focuses primarily on property damage caused by a specific event. This can include damage to the inside and outside of the home. Disaster reports help to estimate damage and repair costs after a natural disaster event.

As the forecast for future natural disasters is on the rise, SingleSource has a variety of disaster inspection reporting products that can get necessary information in the hands of mortgage lenders. This information is imperative to update your portfolio regarding the subject property located in a disaster area, in a timely manner, so you can make the best lending decision for every property.

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SingleSource merged with iMortgage Services, creating a comprehensive range of services that can be applied across the entire loan origination process and servicing cycle.

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