Idaho homeowners are now, today, facing a drop in value of our homes because of oil/gas leases granted by the State in residential subdivisions.
As a career executive in the mortgage banking/insurance industry, a key part of my job was determining factors that would cause a mortgage to decline in value and then establishing rules to safeguard the marketability of mortgages and protect them against any adverse effects of the environment. Flood and earthquake insurance exemplify this.
A major factor the mortgage industry is concerned with is the detrimental effect of industrial activities in close proximity to residential areas. If you have a mortgage, it could be called due and payable because of a gas lease putting you in technical default.
Those seeking a mortgage also need to be able to get insurance. In a leased zone you need greater coverage, for any damage potentially caused by drilling/fracking. Oklahomans have learned the hard way about this: In one recent week, they experienced 70 earthquakes (where prior to petroleum development there were none) – and various insurers are now rescinding earthquake coverage altogether.
Most homeowners in Idaho assume that their title company has protected them from getting into a situation where a gas lease could affect them. This is not the case. Title companies do not need to disclose any information regarding ownership of mineral rights – and they may not be owned by you. In many subdivisions they are owned by the State or the subdivision developer.
The Idaho legislature has opened each and every homeowner to the possibility of a whole raft of detriments: our mortgages and our ability to get property insurance being jeopardized, damages to our property/health and to the sale ability and intrinsic value of our homes.
The Oil & Gas Commission has stated that petroleum development is a profitable venture for the state. I challenge that: Any benefit to Idaho will be completely eclipsed by the loss of individuals wanting to move/live here. The influx of new residents has been an economic boom to Idaho. Do you think this will continue once word gets out that the State has not only allowed oil drilling/fracking in residential areas, but in its own leases states that fracking must be used if it can maximize the taking of gas? Imagine the reaction of someone thinking of buying in Idaho, who learns that a new subdivision he or she is interested in has already had its mineral rights, subject to a drilling/fracking lease to an oil company
Our communities were recently stripped of the right to regulate the oil/gas industry. While Big Oil gets the profits, we citizens are expected to sit by and absorb the losses created by these companies as well as suffer serious health consequences and pollution of our water. All of these damages will result in higher taxes and lower values so all of us will lose at both ends.
Our representatives must be made to realize the harmful effects this will have on the real estate and economic situation in Idaho – and they must repeal rules that favor Big Oil and that take the responsibility for regulation away from our communities. Please communicate with your state and local representatives before it is too late – demand that they protect the value of your home and your right to health and safety, decent air/water.
Idaho is too wonderful a place to live to let oil and gas companies destroy all that we love here.
Thomas Kennedy is a retired mortgage banking and mortgage insurance executive, Eagle, ID