Taking lease money from fracking companies may seem like a good deal... (right now).
But when these property owners go to sell or refinance,
they suddenly may wish they had paid more attention to the warning signs.
Neighbors should be talking with one another about what is going on in their area,
including this policy development....
NY Times
IAN URBINA
March 18, 2012
Mortgages for Drilling Properties May Face Hurdle
Quote:
The Department of Agriculture is considering requiring an extensive environmental review
before issuing mortgages to people who have leased their land for oil and gas drilling.
Last year more than 140,000 families, many of them with low incomes and living in rural areas,
received roughly $18 billion in loans or loan guarantees from the department
under the Rural Housing Service program. Much of the money went to residents in states that have seen
the biggest growth in drilling in recent years, including Pennsylvania, Texas and Louisiana.
The program is popular because it generally requires no down payment.
As its financing has grown and credit markets have tightened in recent years,
the program’s loans have roughly quadrupled since 2004.
<snip>
The proposal by the Agriculture Department, which has signaled its intention
in e-mails to Congress and landowners, reflects a growing concern that
lending to owners of properties with drilling leases might violate the National Environmental Policy Act,
known as NEPA, which requires environmental reviews before federal money is spent.
Because that law covers all federal agencies, the department’s move
raises questions about litigation risks for other agencies, legal experts said.
<snip>
Over the last year, some banks and federal agencies have started revisiting their lending policies
to account for the potential impact of drilling on property values.
“We will no longer be financing homes with gas leases,” Jennifer Jackson,
program director for rural loans in the Agriculture Department’s New York office,
wrote in an internal e-mail this month, citing several factors,
including the costs of conducting such reviews.
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