Need a mortgage? Better not have leased to the gas company.
Posted November 18, 2010 in Curbing Pollution
A recent article out of Northeastern Pennsylvania – a hotbed of gas production in the Marcellus Shale – reports that landowners are discovering an unexpected (and unwelcome) side effect: they can’t get mortgages.
My colleague Amy Mall has previously blogged about how the Federal Housing Agency won’t insure mortgages for homes that are closer than 300 feet from an active or planned drilling site.
And we are all too familiar with the problem of folks – like those in Dimock, PA – who’ve had their water contaminated by nearby gas development activities and who are unable to sell their homes and escape a future of not being able to use their own water wells.
Well now it appears that even when serious accidents and/or bad practices don’t pollute a family’s drinking water, the banks won’t provide mortgages.
The reason? According to a memo from a top executive at Wells Fargo Bank, it is “very difficult to obtain financing due to the potential hazard,” as well as “unknowns,” such as what a drilling lease would do to “the marketability of a property.”
Caveat emptor.
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Comments
KeepItSimple — Nov 19 2010 12:01 PM
All the landownersI hear about eventually regret the decision to lease. . . .not to mention their neighbors! See the new slide show about Towanda PA (where hydrofracking is in full swing) on CNN Money, with sad photographs and captions such as "They regret their decision because they say their well water is now contaminated." "a compressor, essentially a giant engine, on the well pad about 600 feet behind her house. . . runs nearly all the time, and causes her house to vibrate." See http://money.cnn.com/galleries/2010/news/1010/gallery.pennslyvania/index.html
I believe once the lawsuits start, property owners---the landlord---will not be sheltered by the lease arrangements and will be liable for the damage.