Homeowner Refused Mortgage Because of Nearby Gas Drilling
One of the arguments used against natural gas drilling is that it can drive down property values of nearby homes. While MDN has not seen studies to prove or disprove that argument, we did spot this story about a homeowner in western PA who has been refused refinancing of their mortgage by three different national lenders because there’s active natural gas drilling across the street from their home:
Brian and Amy Smith seem to be the first example in western Pennsylvania of a homeowner being denied a mortgage because of gas drilling on a next-door neighbor’s property.
The drilling goes on day and night at a new Marcellus Shale well in Daisytown, Washington County, and Brian Smith told Channel 4 Action News investigator Jim Parsons that he has no complaints — except one.
"As far as drilling and the noise and the lights in the window? No," he said. "But when it affected the value of my home? Absolutely."
The Smiths live across the street from the new gas well. They applied for a new mortgage on their $230,000 home and hobby farm, and Quicken Loans congratulated them on their conditional approval.
"They said all the paperwork will be done by the end of the week and we’ll be able to close," Brian Smith said. "Somewhere in there, they called us and said, ‘Your loan got denied.’ "
In an email, Quicken Loans told the Smiths, "Unfortunately, we are unable to move forward with this loan. It is located across the street from a gas drilling site." Two other national lenders also turned down Brian Smith’s application.
Quicken Loans emailed the following statement to Channel 4 Action News: "While Quicken Loans makes every effort to help its clients reach their homeownership goals, like every lender, we are ultimately bound by very specific underwriting guidelines. In some cases conditions exist, such as gas wells and other structures in nearby lots, that can significantly degrade a property’s value. In these cases, we are unable to extend financing due to the unknown future marketability of the property."*
*WTAE Channel 4 (May 8, 2012) – Couple denied mortgage because of gas drilling