The rising cost of homeowners’ insurance coupled with the rising regularity of weather-related natural disasters is serving to erode the longstanding barrier between mortgage lenders and loan losses, according to a new report published by First Street. As the frequency of disasters has risen — destabilizing the insurance market, limiting coverage and raising consumers’ costs — that barrier is beginning to show signs of stress.

If that barrier breaks down completely, it could lead to a spike in foreclosures, since “the financial stability of borrowers and the performance of their mortgages are increasingly details ⇒

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