KBRA releases research in response to potential RMBS exposure of our rated universe of residential mortgage-backed securities (RMBS) to the unfolding events surrounding Hurricane Idalia, which made landfall in the Gulf Coast of Florida on August 30 as a Category 3 storm.

While it will take time to assess the ultimate impact of the storm, KBRA wanted to identify the potential exposure of our rated universe of residential mortgage-backed securities (RMBS) to this hurricane through the utilization of the FEMA Disaster Declaration Summaries as of August 30. KBRA’s analysis generally assumed that the most heavily affected regions from the storm are the areas with disaster declarations within the state of Florida. As events continue to unfold, our thoughts are with the individuals and families affected by the hurricane.

Key Takeaways

• Generally, KBRA’s rated RMBS show modest exposure to properties located in counties with public assistance FEMA declaration in Florida, with an average transaction exposure of 3% by current balance.
• Within Florida, nine (9) counties account for more than one-half of the exposure area by current balance within the state—counties include Hillsborough, Pinellas, Lee, Duval, Sarasota, Saint Johns, Manatee, Collier, and Polk.
• Six (6) KBRA-rated RMBS transactions have more than 10% exposure to properties located in affected counties.
• While residential mortgage lenders generally require flood insurance when a property is located in FEMA high-risk flood zones, properties located outside of these zones are unlikely to carry such insurance. RMBS transactions are exposed to greater risk in the event flooding occurs outside of high-risk areas and affected properties lack insurance.

Click here to view the report.

Related Publications

• KBRA’s Potential RMBS Exposure to Hurricane Ian
• KBRA’s Potential RMBS Exposure to Hurricane Laura
• KBRA’s Potential RMBS Exposure to Hurricane Dorian

About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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