Is gas drilling causing banks to incur mortgage losses? Are the approximately 10 million natural das drilling leases a threat to the repayment of mortgages? Are banks "increasingly" refusing to write mortgages if gas leasing has taken place on a property?
The notorious NYT gas reporter has another article at page A16 in today's NYT, saying directly or implying affirmative answers to those questions. No doubt the NYT gas reporter is powerful and causes a flurry of political and regulatory activity whenever he is given space in the NYT. Today's article is another self-congratulatory piece documenting how high various regulators and politicians have jumped in response to his piece arguing that gas drilling puts mortgages at risk.
Just one problem exists with the premise-- gas drilling creates the risk of mortgage loan losses--of this latest "great" investigative reporting. The NYT gas reporter is totally wrong. Who would have ever thought that this next Upton Sinclair (in his own mind) could be wrong, given his impeccable track record of error and manipulation?
I am willing to bet that gas leasing actually is associated positively with the repayment of mortgages and negatively with mortgage defaults. This nation is in the middle of a tsunami of mortgage foreclosures, and virtually none result from gas leasing or drilling. Indeed, the money produced for landowners and mortgage debtors has enabled millions of mortgages to be repaid, when lots would not have been, but for the gas revenues.
Every bank that has issued a mortgage should pray that their debtors have gas leases and better still royalty checks.