This week, we present the final episode in our 3-part interview
series on climate risk. We’re going deep on the housing
Our guest co-authored an important study quantifying extreme
weather risk in the U.S. housing market — and identifying how
banks are shifting that risk to us, the taxpayers.
Shayle Kann talks with Amine Ouazad, a
professor of applied economics at the graduate business school HEC
Montreal. He recently co-authored a study called Mortgage
Financing in the Face of Rising Climate Risk.
The New York Times summarized
the research, asking if we are facing similar problems that
caused the housing crisis.
Topics covered on this episode:
- The role of Fannie Mae and Freddie Mac in the mortgage market:
what happens when mortgage loans get securitized to them?
- Why does the decline in poor FEMA mapping and flood insurance
create additional risk for lenders?
- How are risky mortgage loans in vulnerable areas getting sold
to Fannie and Freddie — putting taxpayers on the hook for tens of
billions of dollars in risk?
- What happens after a large disaster in terms of new loans? What
is the significance?
- What might this mean for the health of the housing market as
natural disasters continue to increase in frequency and magnitude?
Will there be a cascading effect?
- What parallels can we draw from the 2008 financial crisis that
resulted from the housing market collapse?
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Support for the Interchange comes from Schneider Electric, the
leader of the digital transformation in energy management and
Support for this podcast comes from PG&E. PG&E is
helping to electrify corporate fleet vehicles. Get in touch with
PG&E’s EV specialists to find
out how you can take your transportation fleet electric.
Source: FS – Transport 2
Climate Risk, Part 3: The Underwater Mortgage Market