Citing climate risk, investors bet against mortgage market 0 SHARES Share it! Share TweetBy ReutersNEW YORK – David Burt helped two of the protagonists of Michael Lewis’ book The Big Short bet against the US mortgage market in the run-up to the 2008 financial crisis. In doing so, Burt is joining the ranks of a small number of investors who have become worried that climate risk is underpriced in these securities, which are pools of home loans sold to investors. FLOOD MAPSClimate researchers and investors say a key culprit for the mispriced risk in the US mortgage market is outdated flood maps drawn by the federal government. Some RMBS issued by Freddie Mac and Fannie Mae since 2017, called credit risk transfer (CRT) deals, move the risk of default to the investors.

Source: Manila Bulletin September 29, 2019 13:52 UTC