Bankers in Pa. assess impact of natural gasPITTSBURGH - 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.