Bankers in Pa. assess impact of natural gas - The HuntingPA.com Outdoor Community
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post #1 of 22 (permalink) Old 09-03-2012, 12:04 PM Thread Starter
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Bankers in Pa. assess impact of natural gas

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PITTSBURGH - When Donald Yost tried to refinance his mortgage about 30 miles north of Pittsburgh in January, he met a roadblock. It wasn't his credit score - he had a solid rating. Or the appraisal he'd paid almost $500 for - that was good, too.

Instead, it was the lease he has that allows a company to drill for gas about a mile under his property, similar to leases many of his neighbors have.

Yost said that in the middle of the application process, ESB Bank told him the gas lease was too prohibitive. So he went to the drilling company, Rex Energy, which agreed to subordinate its claims to the property - in other words, to put the bank's interest first.

"They were actually very good," Yost said of Rex.

But Yost said a bank representative then told him no loans would be given to anyone with a gas-drilling lease. And that's what upsets Yost the most, he said: that the bank didn't tell him upfront that houses with leases didn't qualify. He said it also declined to refund what he'd paid for his appraisal.
Bankers in Pa. assess impact of natural gas

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post #2 of 22 (permalink) Old 09-03-2012, 12:28 PM
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Re: Bankers in Pa. assess impact of natural gas

Always with the negative waves Moriarity...

Did ya read the whole article??

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post #3 of 22 (permalink) Old 09-03-2012, 12:32 PM
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Re: Bankers in Pa. assess impact of natural gas

As always, with Sig, the rest of the story..

Quote:
Eventually, Yost did get his mortgage refinanced with another bank,
Quote:
"Most banks are trying to court landowners who have oil and gas rights," Moran said, adding that there are a lot of rumors about problems with mortgages and gas leases, but little hard data to suggest it's a significant problem.
When I started looking for this mortgage there were 300 banks that wanted to give me money, after I told them the size of the property and that I was going modular, there were 2, and NONE of those refi commercials apply to me.
He probably should have asked up front, not the banks fault or problem.

Every day you see it on the news. Another felons life needlessly spared by inaccurate fire.

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post #4 of 22 (permalink) Old 09-03-2012, 12:33 PM Thread Starter
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Re: Bankers in Pa. assess impact of natural gas

Yup...read the whole article....guy got financing at another bank.

Kind of stinks the guy is out the fee, but good info for lease folks looking to refinance. Might help folks ask the question of the bank.

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post #5 of 22 (permalink) Old 09-03-2012, 08:40 PM
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Re: Bankers in Pa. assess impact of natural gas

In an area where leasing is prevalent and someoone is trying to re-fi or get a new mortgage on a house that has leasable land, I think a bank should ask as part of the application process. They ask lots of other questions so ask one more. Yes, I have been through this process recently and couldn't get a re-fi from a credit union a couple years ago, but am successfully completing the process today. With a 10 year, 0 point, fixed rate of 2.5% how can I go wrong? Oh, I'm no longer leased.

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post #6 of 22 (permalink) Old 09-03-2012, 09:58 PM
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Re: Bankers in Pa. assess impact of natural gas

In Bradford County....the most drilled County in this state for Marcellus Gas.....There is not a issue getting a loan. My son , who is buying his first home, just got his loan approved with no hassle about gas rights.
It is 11 acres of land...that is leased...Local bank doing all the paper work, bank from North Dakota doing the final FHA loan......no issue at all with gas rights.

Gas right leasing is done in a lot of states....this is not new. To insinuate that one can not get a loan or re-fi due to that......is fear mongering......kinda like a democrat....

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post #7 of 22 (permalink) Old 09-06-2012, 10:53 AM
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Re: Bankers in Pa. assess impact of natural gas

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Originally Posted by HomeintheWoods
In an area where leasing is prevalent and someoone is trying to re-fi or get a new mortgage on a house that has leasable land, I think a bank should ask as part of the application process.
Check your application. Bet there was a place for leins, leases, encumbrances, and disclosure. If he disclosed that information to the bank, and they turned him down AFTER he spent money with them, it is time for a trip to the magistrate. If he didn't, which is my guess, then he eats the 500.

Every day you see it on the news. Another felons life needlessly spared by inaccurate fire.

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post #8 of 22 (permalink) Old 09-06-2012, 11:39 AM
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Re: Bankers in Pa. assess impact of natural gas

Quote:
Originally Posted by buzz
It is 11 acres of land...that is leased...Local bank doing all the paper work, bank from North Dakota doing the final FHA loan......no issue at all with gas rights.

Gas right leasing is done in a lot of states....this is not new. To insinuate that one can not get a loan or re-fi due to that......is fear mongering......kinda like a democrat....
So, I suppose HUD is fear mongering???
HUD, (in its Handbook, 4150.2, page 2.7) puts it this way.

Operating and abandoned oil and gas wells pose potential hazards to housing, including potential fire, explosion, spray and other pollution.
No existing dwelling may be located closer than 300 feet from an active or planned drilling site. Note that this implies to the site boundary, not to the actual well site.
The appraiser must examine the site for the existence of or any readily observable evidence of a well.

The fact is many larger banks will not finance to gas leased lands, some will. It does not appear to be as much of an issue with smaller, local banks, despite it being in direct contrast of HUD's policies.
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post #9 of 22 (permalink) Old 09-06-2012, 11:44 AM
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Re: Bankers in Pa. assess impact of natural gas

uh...if the residence is more than 300 ft it appears that it would conform to HUD policy... even with your interpretation of what HUD implies

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post #10 of 22 (permalink) Old 09-06-2012, 12:15 PM
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Re: Bankers in Pa. assess impact of natural gas

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Originally Posted by timberdoodle
uh...if the residence is more than 300 ft it appears that it would conform to HUD policy... even with your interpretation of what HUD implies
My interpretation? You assume too much. That's a direct quote from the Hud handbook. (including the site boundary, not well site clarification)
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