Is your property leased for unconventional drilling and fracking? Sorry, no mortgage for you. Do you have unconventional drilling and fracking as a neighbor? Sorry, your property has been devalued.
US Finance Post: Mortgages and Hydraulic Fracturing
Reporter: Jayson Derrick April 3, 2014
The CEO and president of the credit union is quoted as saying that if an owner allows a rig on his land, “I have to say to your neighbors,” sorry, but your property has been devalued.
Mortgage institutions are refusing mortgages on properties that are leased for unconventional drilling and fracking and on properties with wells on them.
It seems they don’t care much for the split estate either.
…the combination of property rights on the surface and drilling rights underground is one that does not work.
In Argyle, TX, the Sizeloves home was valued at $361,000 on the 2009 tax rolls and was valued at $95,000 on the 2010 tax rolls.
In Arlington, Kim Feil’s home was devalued 30% because she has a facility 1/2 mile away.
Did you work hard to buy your home hoping to grab a small slice of the American pie? Sorry, but…
you’ve been fracked!
Expect things to get worse with each LNG export permit that gets approved.
Right after I posted this, I received a new article to be published in the Albany Law Review.
UPDATE to add this new research:
A few of the many interesting points:
- A lease diminishes a home’s market value.
- An apparent nexus between gas drilling operations and contaminated water diminished value.
- Structural damage to the residence represents another cause for concern.
- Questions about restoration of property effect long term value because a mortgage lender expects the residence and land to retain its value for the life of the loan.
- Compulsory integration creates issues that reduce value.