Tuesday, September 4, 2012

At Least One PA Bank Blocks Refinancing on Any Property with Gas Lease

From The State Journal:
When Donald Yost tried to refinance his home about 30 miles north of Pittsburgh in January, he met a roadblock. It wasn't his credit score — he had a solid rating — or the appraisal he'd paid almost $500 for — that was good, too.
Instead, it was the lease he has that allows a company to drill for gas about a mile underneath his property, similar to leases that many of his neighbors have.
Yost said that in the middle of the application process ESB Bank told him the gas lease was too prohibitive. So he went to the drilling company, Rex Energy, which agreed to subordinate their claims to the property — in other words, to put the bank's interest first.
"They were actually very good," Yost said of Rex.
But Yost said a bank representative then told him that no loans would be given to anyone with a gas drilling lease. And that's what upsets Yost the most, he said: that the bank didn't tell him upfront that homes with leases didn't qualify. He said it also declined to refund what he'd paid for his appraisal.
Eventually, Yost did get his home refinanced with another bank — after he paid for a second appraisal. ESB spokesman Daniel Schwartz said the bank has no comment.
Read the rest of the article here.

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