Walter Hang Interview - The Capitol Pressroom for May 20, 2011

Activist Walter Hang of Toxics Targeting recently sent a letter to Governor Cuomo about mortgage lenders and hydrofracking. What could they possibly have in common? We will tell you.

A post from The Capitol Pressroom which includes a partial transcript of the interview and the letter sent to Governor Cuomo in its entirety.

Does Natural Gas Leasing Hurt Property Values?

QUESTION — Does natural gas leasing hurt property values?

ANSWER – There is some damning evidence that it does.

Walter Hang of Toxics Targeting joined us on the Capitol Pressroom last Friday 5/20 to discuss this issue. He spoke with several banking institutions about their rules surrounding lending money for both residential and commercial land investment, and the results are on his website.

Here are the highlights:

• “Gas/oil leases are generally NOT (emphasis in the original) accepted by lenders such as Wells, First Place Bank, Provident Funding, GMAC, FNCB, Fidelity, FHA, First Liberty or Bank of America. It would be difficult, if not impossible, to the meet the ‘acceptable if commonly granted’ rule.”
• “Surface or sub surface rights within 200 feet of a residential structure would not be acceptable for conventional financing in the Secondary market.”
• “NYS title insurance gas endorsements specifically void title insurance coverage if the premises are used for any commercial venture.”
• “Lenders are responsible to warrant several items to the investor in the Secondary market that can not be done leaving lenders with significant liability.”
• “Surface or sub surface rights within 300 feet of a residential structure OR within 300 feet of property boundary lines would not be acceptable for FHA [Federal Housing Administration] (Department of HUD [Housing and Urban Development]) financing.”

On Monday I confirmed that Assemblymember Barbara Lifton was so concerned about how gas leasing might affect land values in Tompkins County, that she met with three members of the Governor’s staff to bring them up to date: Jim Malatras, Tony Giardina and Tom Congdon. I still haven’t had any confirmation from the Governor’s office. I am also still waiting to hear what they intend to do about this issue.

According to Lifton, gas drillers – at one time – did let people bow out of their leases if they were looking to move and borrow money. But those days are over. Now that the industry is required to have leases on 60% of all land within a ”spacing unit” it has been hesitant to allow land owners out of those leases.