Raiding the homestead

Raiding the homestead by Peter Mantius, August 2, 2012, The Corning Leader
If, as expected, Gov. Andrew Cuomo allows the first permits to frack shale formations for natural gas in New York State this fall, unsuspecting homeowners throughout the Southern Tier will soon be receiving shocking letters from the state. Each letter will announce that a gas driller has state authorization to drill horizontally underneath a home and to inject unnamed toxic chemicals there. The homeowner will have no power to stop it, even though the drilling activity will create new uninsured risks and will likely expose the mortgage on the property to technical default. … But there’s another reason to avoid identifying the toxins: acknowledged use of specific hazardous chemicals violates contract language contained in virtually every mortgage agreement covering properties drillers want to frack. Even the act of signing a gas lease raises thorny legal issues. “Signing a gas lease without lender consent is likely to constitute a mortgage default,” attorney Elisabeth N. Radow wrote in the November/December 2011 edition of the New York Bar Association Journal. … The industry’s response is that drilling’s extreme opponents exaggerate the risks of fracking. Really? Well, meet the extremists:
– Nationwide, one of the country’s largest insurers of homes, recently underscored that it does not cover fracking-related losses and that it doesn’t plan to renew properties with gas leases. …
– Bank of America and Wells Fargo, two megabanks among a growing lists of lenders, now either refuse to write mortgages on gas-leased properties or require substantial buffer zones that exceed state setbacks for drilling.
– The multi-trillion-dollar secondary mortgage market, which buys mortgage paper from first-tier lenders, has guidelines that bar gas-leased properties.
… You have no right to negotiate, no right to reject the deal outright.

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