JSMedia – With more oil and gas drilling taking place across the country, mortgage lenders are becoming more concerned about fracking. While the process appears to have minimal impact on home mortgage lending, some companies have taken precautions to avoid risks. As of May 2012, the Federal Housing Administration (FHA) has directed appraisers to take into account the impacts of gas drilling. In addition, the government has also told lending institutions that they can’t make loans on properties near drilling sites or near oil and gas production facilities.
Nevertheless, there is a downside to fracking for mortgage lending. Some lenders are reconsidering their policies and refusing to lend to those in the area. Other lenders are not taking the financial risk and are tightening their policies to prevent the lending of homes near fracking sites. As a result, these properties are no longer available in the secondary mortgage market, and home buyers should do their due diligence before purchasing a home in areas where shale gas extraction is taking place.
Many mortgage lenders have canceled mortgage loans in communities near fracking operations because of concerns about fracking’s impact on their neighborhoods. However, despite the concerns of the public, the industry is not immune from the risks associated with unconventional gas drilling. Some banks, such as Bank of America, are reviewing and revising their policies in the wake of recent disasters and reports. Some have even stopped lending in regions where drilling is underway.
Mortgage Lenders Increasingly Worried About Fracking
Moreover, fracking has a negative effect on property values. The value of a home is determined by the willingness of a prospective buyer to pay for it. In areas where fracking is occurring, property values will plummet. This will lead to a major problem for homeowners, including foreclosures, and may result in a global financial crisis. It’s important to remember that mortgage lenders are aware of the risks associated with fracking and how they can protect their interests.
For example, fracking can affect property values, which is based on the value of the property. But this issue is not unique to fracking. In the UK, most housing stock can withstand a large earthquake, and a mortgage lender must consider the risk in order to determine the value of a home. The impact on the value of a home is huge. For this reason, the property market could be affected by fracking.
There are some fracking opponents who argue that fracking causes an increase in earthquakes. The SEC does not mention earthquakes in its list of potential risks. But opponents claim that the process is responsible for increasing earthquakes in a fracking region. A study by the United States Geological Survey, a nonprofit organization, found that fracking is not a cause of earthquakes. But it has created new concerns, affecting a number of cities.
The New York Times published an article on fracking, which cited the “fracking boom” in the Northeast. The Wall Street Journal article cited that there are 30 to 35 states where unconventional gas drilling occurs. The Wall Street Journal reported that, since 2000, 15.3 million Americans have lived within a mile of a gas well. The number of Americans affected by a shale drill site has not been confirmed.
The fracking industry has a long history of poor regulation. While some municipalities have banned fracking, many others are taking the lead. Pittsburgh banned shale oil drilling in 2010 and a dozen other cities have followed suit. Last fall, four cities in Colorado banned fracking or severely restricted it. Several backers are currently collecting signatures for a ballot measure in 2014 that would give communities local control over drilling.
While fracking has many benefits, the risks of gas drilling are significant. For example, fracking can cause water contamination. The chemicals used in the process can affect drinking water supplies, so it’s critical to ensure the integrity of fracking industry data. In the case of the Laurel Highlands, the fracking industry’s executives are receiving bonuses despite the fact that fracking is a risky endeavor.