Banks aren’t lending on leased properties, realtor says; local economies likely to be devastated by gas drilling …. and it’s already starting

Apr 20
2010

Gas drilling will be good for business, its boosters say.

At another must-see post over at Breathing is Political:
“Mortgage Troubles on Leased Properties,” a realtor says otherwise:

  1. Liz: Here are the names of banks who will not fund leased properties, based upon environmental risk, as per information gained from a mortgage broker who is still looking further into the situation:
    First Place Bank
    Provident Funding
    GMAC
    Wells Fargo (will know for sure in a few days)
    FNCB
    Fidelity
    FHA
    First Liberty
    Bank of America
    A few local lenders who underwrite their own are still lending.
    We are trying to also get a determination from the sources at Freddie Mac, Fannie Mae and Ginnie Mae.
    Will try to keep this updated.

    Comment by Jennifer Canfield — April 20, 2010 @ 10:49 am

  2. The coming of gas drilling to our area is the death knell to our property values. First of all second homeowners seeking respite from the City are already fleeing away from Marcellus Shale looking towards the Hudson Valley and Western Massachusetts.
    Those who have leased their lands or are even near leased lands will find that their appraisals will go down and many lenders including FHA will not offer mortgages on these properties. And homeowners’ insurance how will that be affected?
    I am wondering how an insurance risk appraiser would view a home with gas wells on or near the property?
    Something else to consider?

    Comment by maria — April 20, 2010 @ 1:40 pm

  3. Yes Maria. I have a long history of providing my customers with opportunity to buy properties that were free of environmental threats. Those customers came, in many cases, with a willing attitude and pure joy over being able to buy in an unspoiled area with abundant natural resources. They hired local contractors to build or improve permanent homes that they could either retire to or build a new life for their families. Most of these people found a way to show their appreciation by becoming contributing members of our local communities. Many encouraged their extended families and friends to buy here as well. All of that supported our local economy and kept property values increasing as our supply was always limited. Now that same group is looking elsewhere to avoid the environmental risks associated with the process of fracking. It is commendable that metro NY area publications are writing honestly about the issues as they unfold and that the public is made aware of the potential harm. Communities that lack the cohesiveness and knowledge to protect all of their citizens and who bend to facilitate the gas companies’ needs and those of the many who signed leases stand to lose the most even if they don’t realize it right now. Jobs in construction and services will diminish or be lost, retail shops will wither. This could cause loss of revenue that once paid for property taxes and mortgage payments and this could further lead to foreclosures. Unless these same people turn to jobs created by the transient population of drillers and associated workers, jobs like bars, motels, and dining establishments that would compete with those already trying to exist, I can’t see much on the horizon that would improve property values. People who appreciated what we already had are looking elsewhere.

Comment by Jennifer Canfield — April 20, 2010 @ 2:57 pm

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