Sunday, May 11, 2014

Fracking with Real Estate

Nobody prefers pollution over a clean environment. Even the most ardent anti-environmentalist has a cutoff point where they believe environmental contamination is not worth the benefits derived from the activity that creates it.  Though where this line is drawn is a matter of one’s values and opinion, the information that informs this opinion should be factual. An often heard opinion is that Oil & Gas development and fracking is good for Huerfano County’s economy, but this claim is rarely, if ever, supported by a cost benefit analysis factoring in the negatives like noise, toxic fumes, pipelines, increased truck traffic, lights, noxious air emissions, water contamination and the potential destruction of our clean and uncluttered landscape.  All of which are economic liabilities for property owners. Banks and insurers are adopting guidelines that forbid mortgage loans or insurance coverage on properties affected by drilling.  Boulder, CO, real estate agent, Nanner Fisher, told the Boulder iJournal that selling properties near drilling operations is difficult. “For the most part, if there is a well that’s visible when you show a property, [the prospective buyer] will ask to see something else.” According to a white paper prepared for the New York State Bar Association, home mortgage lender Wells Fargo won’t make home loans for properties that have gas drilling leases attached to them. Provident Funding, GMAC, FNCB, Fidelity, First Liberty, First Place Bank, Solvay Bank, Tompkins Trust Co. and CFCU Community Credit Union are putting hard-to-meet conditions on mortgages or denying loans on properties with O&G leases. Federal mortgage institutions (FHA, Fannie Mae, Freddie Mac) have prohibitions against lending on properties where drilling is taking place or where hazardous materials are stored. A drilling lease on a property financed through one of these agencies would result in a “technical default.” Homeowners who think damage to property incurred by drilling accidents is covered by insurance need to think again. Such damages are typically not covered. 
An article from Eco Watch about this subject:


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