A recent article out of Northeastern Pennsylvania – a hotbed of gas production in the Marcellus Shale – reports that landowners are discovering an unexpected (and unwelcome) side effect: they can’t get mortgages.
My colleague Amy Mall has previously blogged about how the Federal Housing Agency won’t insure mortgages for homes that are closer than 300 feet from an active or planned drilling site.
And we are all too familiar with the problem of folks – like those in Dimock, PA – who’ve had their water contaminated by nearby gas development activities and who are unable to sell their homes and escape a future of not being able to use their own water wells.
Well now it appears that even when serious accidents and/or bad practices don’t pollute a family’s drinking water, the banks won’t provide mortgages.
The reason? According to a memo from a top executive at Wells Fargo Bank, it is “very difficult to obtain financing due to the potential hazard,” as well as “unknowns,” such as what a drilling lease would do to “the marketability of a property.”
Caveat emptor.