New research first reported on Friday by The New York Times suggests banks are shifting mortgages made riskier by the climate emergency over to financial institutions backed by U.S. taxpayers—findings that “echo the subprime lending crisis of 2008, when unexpected drops in home values cascaded through the economy and triggered recession.”

Readers described the Times report as “huge” as well as “fascinating and provocative.” It elicited immediate critiques and concerns regarding banks’ actions and the sweeping potential consequences for American taxpayers and the global economy.

The research is set to be published Monday as a National Bureau of Economic Research (NBER) working paper entitled Mortgage Finance in the Face of Rising Climate Risk (pdf).

“It is less likely that borrowers will continue to make mortgage payments if their homes are literally underwater.”
—Sean Becketti, economist

Co-authors Amine Ouazad of HEC Montreal and Matthew Kahn of Johns Hopkins University analyzed how lenders have handled mortgages in U.S. regions hit by destructive hurricanes between 2004 and 2012.

“They found that, after those hurricanes, lenders increased by almost 10 percent the share of those mortgages that they sold to Fannie Mae and Freddie Mac, government-sponsored enterprises whose debts are backed by taxpayers,” the Times reported.

According to the newspaper:

As unsustainable humanity activity continues to drive up global temperatures, which scientists say is making extreme weather worse, a growing number of homeowners impacted by natural disasters could default on their mortgages—which, according to the new paper, banks are selling to Fannie and Freddie. The researchers warn the impacts could be felt across the country.