Owners, not lenders, carry the risk climate change poses to homes
If mortgage lenders can steadily improve their understanding of climate risks, they can work those risks into their loan calculations
Climate change poses risks to real estate that home buyers may not be able to predict. As sea level rises, coastal properties, for example, may be subject to increased flooding and intensifying storm surges. First-time home buyers often lack the expertise to evaluate these new risks, and thus tend to under-estimate them and overpay for increasingly exposed properties.
Unfortunately, the risks they accept are not borne by themselves alone. Rather, our research has found, it is shared by mortgage lenders and, through the operations of Freddie Mac and Fannie Mae, American taxpayers...