Wednesday, November 17, 2010

Uh Oh...Some banks not loaning money on leased properties

Didn't we say this may be a good reason for not leasing but some did not listen!!!!

Here are a few paragraphs from the article that appeared in The Pike County Courier.

Rudalavage has been told that Wells Fargo would not be inclined to fund a property with a gas lease. In a memo, a top executive at the bank writes it would be “very difficult to obtain financing due to the potential hazard.” The memo continues, “Also if the Gas Leasing is new to the area there are too many unknowns.” One of the unknowns, according to the executive, is what the lease would do to “the marketability of a property.”

Rudalavage has been told by First Place Bank that it would pass on financing a gas-leased property. She says Citizen’s Savings & Loan has recently changed its policy from a “no deal” to a “maybe,” explaining that for a fee of 350 dollars, its attorney would review the lease and make a determination. This makes Rudalavage worry.

“I do believe a lot of people signed leases without knowing it could hurt future selling or financing of the property.” She hopes a uniform policy will be adopted in the financial banking industry.

Click here to read article.


Anonymous said...

The industry tried to convince us that it helped property values but now we know the truth.

I.B. Screwed said...

Would having a massive gathering pipeline under the front yard like the one proposed for Carter Ave. (FW) make it less risky for lenders and insurers?