Tuesday, April 20, 2010

Gas Exploration and Mortgage Companies

Breathing is Political posted great information on how gas drilling has impacted the ability to get mortgages and loans on housing. People keep asking for evidence on how drilling affects property values. Here is a good example.

All residents should be concerned about this information received from a local realtor:

“I had a customer inform me two days ago that the home equity loan they were obtaining in order to purchase a small investment piece near them was turned down by GMAC because their home property was under a gas lease. I dug a little further and found through mortgage brokers that that they are encountering the same reluctance on the part of some local and some bigger banks to lend on leased properties. I hope those who have signed leases have figured this into the equation. A similar example would be as in the case of Flood Zone properties for whom the Flood Insurance program was withdrawn, banks would also not lend on those. In the real estate world, things like this are a huge consideration in factoring property values. Just thought some people might not be aware of this trend by lenders.”

And, as has been reported by Breathing previously, the Federal Housing Administration issued this warning:

Operating and abandoned oil and gas wells pose potential hazards to housing, including potential fire, explosion, spray and other pollution. Therefore, no dwelling may be located closer than 300 feet from an active or planned drilling site or 75 feet from an operating well; this applies to the site boundary, not to the actual well location.

click here to read about it at Breathing is Political.
This is not good.

8 comments:

Liz Bucar said...

This information may prove devastating to so many hard-working people. Breathing is in the process of getting a series of articles together from realtors who will feel comfortable speaking to the issue on the record. In the meantime, a list of banks that are resistant to providing mortgages has been posted in Breathing's comment section. Hoping the news gets infinitely better, Liz

Another Concerned Citizen said...

Liz, Thanks for the info

Anonymous said...

How much does this have to do with mortgages being tight to begin with? Lenders are just not lending and are probably using any criteria they can to limit the list of potential loans

Anonymous said...

The article specifically highlights that the FHA will not loan money to a person if the property is within 300 feet of previous or present gas drilling activity and one that has pending well. This has nothing to do with tightening lending. In areas where drilling has been going on for a while, owners of some properties with problems are simply walking away from their homes because they can't resell them. The contaminaton of the soil and water is so bad. We already have that here in Texas. Do you think that the Ruggieros will be able to resell their property?

Anonymous said...

Anon 7:42 - Are there any homes in Flower Mound situated within 300 feet of a gas well? I believe that the individual mentioned lives in Decatur, where he is not protected by our strong oil and gas ordinances.

Anonymous said...

Are you referring to the "strong" oil and gas ordinance of which there have been exceptions to every rule except once?

Anonymous said...

So how many FM houses are within 300 feet of a gas well?

Anonymous said...

anon 7:42. The O & G ordinance allows variances down to 300 feet. Since just about every well in this town has received variances to allow them to be drilled. It is possible. Yes I know that they would have to be a lease signer in order for the variance to be granted to 300 feet. But that is the point, when they go to sell their houses, it will be more difficult.