New frack attack: Mortgage rules

A genuine issue are just another “means to the end” of fracking?

The [anti-fracking] New York Times reports,

Federal lawmakers, bank regulators and law enforcement officials are broadening their efforts to ensure that the growing number of oil and gas leases being signed by landowners across the country comply with mortgage rules and do not create new risks for lenders, appraisers or landowners.

The efforts stem from mounting concern that mortgages may be invalidated by people’s signing such leases without first getting permission from their banks.

Leases often allow certain activities, like storing hazardous waste on a property, that are expressly forbidden by mortgages because they can harm resale values. Such activities also violate rules set by institutions like Fannie Mae, Freddie Mac and Farmer Mac, which buy mortgages from banks…

The actions come after an article in The New York Times last month that described the growing concerns about conflicts between mortgage rules and millions of oil and gas leases. State officials have also started investigating the problem.

While this could be a legitimate issue in a limited number of cases — e.g., where fracking activity leads to accidents or contamination — this could easily be managed by requiring insurance to cover mortgagee risks.

Instead of that enabling route, it’s like that this controversy will be used to curtail fracking activity.

Read the full New York Times article.

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