Fracking is the process of drilling into the earth and injecting water, sand, and chemicals at high pressure to release natural gas and oil. While it has led to a boom in domestic energy production, it has also raised concerns about its impact on the environment and human health. And now, mortgage lenders are starting to worry about the potential risks associated with fracking.
What are the Risks?
One of the main risks associated with fracking is the potential for water contamination. Fracking requires large amounts of water, and the chemicals used in the process can leak into the groundwater and contaminate drinking water sources. This can lead to health problems for people who drink the water, and it can also reduce the value of homes in the area.
Another risk is the potential for earthquakes. Fracking involves injecting fluids into the ground at high pressure, which can cause the earth to shift and trigger earthquakes. This can cause damage to homes and other buildings, and it can also reduce property values.
Why are Mortgage Lenders Worried?
Mortgage lenders are worried about the potential risks associated with fracking because they could lead to a decline in property values. If a home is located near a fracking site, it may be more difficult to sell, and it may also be worth less than similar homes in other areas. This can make it harder for homeowners to sell their homes and for mortgage lenders to recoup their investments.
Additionally, mortgage lenders are concerned about the potential liability they could face if fracking leads to water contamination or other problems. If a homeowner defaults on their mortgage because of problems related to fracking, the lender could be left holding the bag.
What Can Homeowners Do?
If you’re a homeowner who lives near a fracking site, there are a few things you can do to protect yourself. First, you can have your well water tested to make sure it’s not contaminated. You can also take steps to make your home more earthquake-resistant, such as reinforcing the foundation and securing heavy objects.
If you’re thinking about buying a home in an area where fracking is taking place, it’s important to do your homework. Research the area thoroughly and talk to a real estate agent who is familiar with the local market. You may also want to consider purchasing an earthquake insurance policy to protect your investment.
What’s Being Done to Address the Issue?
There is growing concern about the potential risks associated with fracking, and some states and municipalities are taking steps to regulate the industry. For example, some states have implemented moratoriums on fracking until more research can be done on its impact, while others have passed laws requiring companies to disclose the chemicals they use in the process.
Additionally, some mortgage lenders are starting to take a closer look at the potential risks associated with fracking. Some lenders are requiring that borrowers disclose whether their property is located near a fracking site, while others are refusing to lend money for homes located in areas where fracking is taking place.
Conclusion
As the fracking industry continues to grow, it’s important for homeowners and mortgage lenders to be aware of the potential risks associated with the process. By taking steps to protect themselves and staying informed about the latest developments in the industry, homeowners and lenders can help ensure that they’re not caught off guard by any unexpected problems.