Cochecton Zoning to Allow Widespread Drilling; Mortgage Troubles on Leased Properties


(For more on this post, please see Brenda Seldin’s description of her conversation with Cochecton Supervisor Gary Maas and Jennifer Canfield’s list of  banks pulling back from providing mortgages on leased properties.)

Breathing Is Political received this notice in this morning’s email:

“The Town of Cochecton is proposing to change their zoning code to allow for the “Exploration and recovery of natural gas shall also be considered an extraction operation.” This will be allowed throughout most of the town (approximately 90%) in the RU and AC zones. This will include almost the entire Delaware River Valley. To my knowledge it has not had the required SEQR review, comments by the County Planning Department, etc. I received a copy to review as a member of the planning board.

I urge all of you who might be concerned to start getting involved and informed now. It is easier to make an impact at the beginning before momentum is gained in support. Please pass the information along to all others you know who may be concerned.

Under the current zoning only surface mining is permitted.”

Although Breathing has not found a website for the Town of Cochecton,  here is the  contact information:

TOWN OF COCHECTON
Town Board Meetings:
2nd Wednesday, 7:00 P.M.
Town Hall: (845) 932-8360
FAX: (845) 932-7938

Interested parties may contact the Town Hall to receive zoning maps.  Breathing is headed to the County Planning Office as soon as it drinks its coffee.

All residents should be concerned about this information received from a local realtor:

“I had a customer inform me two days ago that the home equity loan they were obtaining in order to purchase a small investment piece near them was turned down by GMAC because their home property was under a gas lease. I dug a little further and found through mortgage brokers that that they are encountering the same reluctance on the part of some local and some bigger banks to lend on leased properties. I hope those who have signed leases have figured this into the equation. A similar example would be as in the case of Flood Zone properties for whom the Flood Insurance program was withdrawn, banks would also not lend on those. In the real estate world, things like this are a huge consideration in factoring property values. Just thought some people might not be aware of this trend by lenders.”

And, as  has been reported by Breathing previously,  the Federal Housing Administration issued this warning:

Operating and abandoned oil and gas wells pose potential hazards to housing, including potential fire, explosion, spray and other pollution. Therefore, no dwelling may be located closer than 300 feet from an active or planned drilling site or 75 feet from an operating well; this applies to the site boundary, not to the actual well location.

15 thoughts on “Cochecton Zoning to Allow Widespread Drilling; Mortgage Troubles on Leased Properties

  1. Brenda Seldin

    I just spoke with Cochecton Town Supervisor Gary Maas regarding the changes in zoning law for Cochecton. He told me that they are starting the process of putting in protections for the Town of Cochecton if drilling is to come. Some examples of things they are looking into are: making sure that any gas compressors are sound proof, putting in place protections for the roads and putting in place setbacks.

    This process is just in the initial stage and all these things will be discussed at the next town meeting on April 29th at 7 PM at the Cochecton Town Hall on Route 116. I asked him if there would be a period of public comment. He said there would be, probably a month after the meeting on April 29th.

    I will be at the April 29th meeting, and at the subsequent one for the public comments.

    I also asked him if he knew where leases had been signed in Cochecton Township. He told me there were some on County Road 114, Tyler Hill and on Skipperene Road.

  2. Amanda Halloran

    Thank you again, Liz, for publishing this. It is vital that as many people as possible go to these meetings, and get out their concerns. I’m curious to find out how much research the board has done on the effects of fracking. Personally, I feel like nothing should happen until the E.P.A. reports come out. The Delaware and its inhabitants (be it human or otherwise) are too important to jeopardize without understanding the full effects of this drilling.

  3. Jennifer Canfield

    Liz: Here are the names of banks who will not fund leased properties, based upon environmental risk, as per information gained from a mortgage broker who is still looking further into the situation:
    First Place Bank
    Provident Funding
    GMAC
    Wells Fargo (will know for sure in a few days)
    FNCB
    Fidelity
    FHA
    First Liberty
    Bank of America
    A few local lenders who underwrite their own are still lending.
    We are trying to also get a determination from the sources at Freddie Mac, Fannie Mae and Ginnie Mae.
    Will try to keep this updated.

  4. maria

    The coming of gas drilling to our area is the death knell to our property values. First of all second homeowners seeking respite from the City are already fleeing away from Marcellus Shale looking towards the Hudson Valley and Western Massachusetts.
    Those who have leased their lands or are even near leased lands will find that their appraisals will go down and many lenders including FHA will not offer mortgages on these properties. And homeowners’ insurance how will that be affected?
    I am wondering how an insurance risk appraiser would view a home with gas wells on or near the property?
    Something else to consider?

  5. Jennifer Canfield

    Yes Maria. I have a long history of providing my customers with opportunity to buy properties that were free of environmental threats. Those customers came, in many cases, with a willing attitude and pure joy over being able to buy in an unspoiled area with abundant natural resources. They hired local contractors to build or improve permanent homes that they could either retire to or build a new life for their families. Most of these people found a way to show their appreciation by becoming contributing members of our local communities. Many encouraged their extended families and friends to buy here as well. All of that supported our local economy and kept property values increasing as our supply was always limited. Now that same group is looking elsewhere to avoid the environmental risks associated with the process of fracking. It is commendable that metro NY area publications are writing honestly about the issues as they unfold and that the public is made aware of the potential harm. Communities that lack the cohesiveness and knowledge to protect all of their citizens and who bend to facilitate the gas companies’ needs and those of the many who signed leases stand to lose the most even if they don’t realize it right now. Jobs in construction and services will diminish or be lost, retail shops will wither. This could cause loss of revenue that once paid for property taxes and mortgage payments and this could further lead to foreclosures. Unless these same people turn to jobs created by the transient population of drillers and associated workers, jobs like bars, motels, and dining establishments that would compete with those already trying to exist, I can’t see much on the horizon that would improve property values. People who appreciated what we already had are looking elsewhere.

  6. lizbucar Post author

    Dear Jennifer,

    Thank you very much for your information about banks and mortgages. Other sites are picking it up and that’s of huge importance. Those of us concerned with the economic impacts of drilling have long-suspected banks would become increasingly reticent and here it is. Please keep us informed as your research continues and please consider writing an explanatory article. Questions are coming in and they deserve expertise I simply don’t have.

    Maria,
    Thank you for the questions about mortgage insurance, etc. The link to HUD/FHA alludes to the issue and risk but it requires more explanation. Another question that arrived via email concerns property values falling below the bank’s mortgage investment due to leasing or proximity to a well. It’s crux to a fuller understanding of the entire economic boom theory. We’ve seen it in other scenarios (and recently) where the actual value of a property plummets below the amount of the mortgage and banks have refused (or resisted mightily) to re-negotiate. Homeowners have simply walked away and whole neighborhoods have been abandoned. That’s the worst case scenario, of course but it will be instructive and heartbreaking, I fear, to watch what happens in Dimock and DISH, to name just two. We really need a whole Q & A on the real property issue.

    Maybe that’s the way to approach it. Perhaps property owners can be encouraged to ask their questions and Jennifer and others can be found to bring their expertise to bear. People are going to need help to find their ways through this.

    Jennifer, can you help with this? Not to put you on the spot, or anything…?

  7. Mel

    Instead of guessing what will happen to property values, why not look into an area where drilling has already been in progress for years? I live on the Barnett shale in Texas where drilling takes place, but you never hear about it affecting home or land prices. I assume if you had a visible rig nearby it would definitely affect your property values, but if drilling is in your area, it seems to remain a hidden industry.

    Also, homes and property are bought and sold here, sometimes for decades, without the mineral rights attached to the property. In some instances, mineral rights belong to a family who has owned those rights since the 1930s.

    It would be an education for NY to study an area where drilling has worked to most people’s benefit, instead of trying to reinvent the wheel, and panicking. It’s all been done before.

  8. Jennifer Canfield

    For Mel and others: It would be interesting to know whether there are Federally designated unspoiled natural resources such as the Delaware River and contributing watersheds near the Barnett shale. If there are, it would help to know if the same serve large population bases such as we have within two hours of here. It would also help to know whether their economy was thriving and driven by such population base seeking to join a way of life, noted for its rural character, which in turn spurred such economic growth and well being as we had been experiencing. My point is, each area’s dynamics are different.

  9. dmann

    As someone who was looking to purchase a second home in the area, I can say that the issue of gas drilling has me concerned.
    I was looking at a few houses in Cochecton, but will not buy until I can clearly understand the impact. I certainly won’t buy if they allow unfettered drilling.

  10. Katie Tam

    Communities that lack the cohesiveness and knowledge to protect all of their citizens and who bend to facilitate the gas companies’ needs and those of the many who signed leases stand to lose the most even if they don’t realize it right now. Jobs in construction and services will diminish or be lost, retail shops will wither

  11. iga smith

    I did like the article really much, was really informative and the best part was that only the required part was elaborated, to the point concise information always helps and keeps readers running around digging for the information’s will never require a reread. I really wish spammers read these articles and check how easy it is to be human and respect knowledge.

    This is a awesome write-up, im happy I came across this. Ill be back again later on to check out other posts that you have on your blog.

  12. Guest

    I am a realtor and can tell you with absolute certainty that if there are any “ongoing environmental conditions” on your property – even ones that simply require monitoring to be sure no change has occurred – the lender will reject your applications. These loans cannot comply with Fannie Mae or Freddie Mac guidelines and therefore cannot be sold in the secondary market. In simple English, if they are drilling anywhere near your property you are never going to be able to sell your house to anyone other than an all cash buyer. How is that going to affect you? In your wallet!

  13. Jennifer Canfield

    It would behoove all Damascus residents to take a look at what Damascus Twsp is trying to do…take drilling which is an industry out of special exceptions category and make it a principal permitted use thereby cancelling the need for the special exceptions permitting process. This is in direct conflict with their own fairly recent tri-Township comprehensive plan which had listed drilling as an incompatible use because of the topography, rural character and natural water resources…funny how things change depending on who is on board as Planning Commission members, Supervisors and town attorney…imagine…all are lease signers. Also, I’ve heard they are starting to install a well pad in Damascus Township without the necessary permit and review before the ordinances are even changed…could it be that we no longer have a need for laws and order?

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