Much of the East Coast oil boom is taking place on property where oil or gas rights have been sold to energy companies, bringing potential riches to some lucky landowners and headaches to some banks. At least three lenders -- Tompkins Financial in Ithaca, N.Y., Spain's Santander Bank, and State Employees' Credit Union in Raleigh, N.C. -- are refusing to make mortgages on such properties. The boilerplate New York state mortgage agreement, used by Fannie Mae and Freddie Mac, states that "you cannot cause or permit any hazardous materials to be on your property and it specifically references oil and gas ... That alone would make it a problem," says Greg May, vice president of residential mortgage lending at Tompkins.
From "Fracking Boom Gives Banks Mortgage Headaches"
American Banker (11/12/13) Peters, Andy
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