"Big Short" investor Dave Burt warned of the subprime mortgage crisis that launched the US into the worst recession since the 1930s. NowMortgage lenders are overestimating the value of many homes because they've failed to take into account how much of a threat flooding poses, said Burt, now the CEO of investment research company DeltaTerra Capital.
"Ultimately, until people have good information about what these climate-related costs are going to look like, we're creating new problems every day," Burt told CNBC. If this does not change, he warned, the housing market is in for another crash: a 2008-level price correction. Burt's economic hypothesis is that climate crisis-related events such as increase in disastrous flooding, could reduce the cost of the homes by a lot, which puts mortgage borrowers at risk of not being able to pay back the loan — funds that could be ultimately lost.