No, not making this up. A homeowner faced some difficulty in refinancing their mortgage after a fracker filed a lien on the property. It comes as a surprise to most homeowners that when their mineral rights are sold or leased, the frackers pledge those mineral rights as collateral against their own bank borrowings. So each property is encumbered by that corporate line of credit lien. Surprised ? Who the frack did they think they were dealing with ?
Leasing or selling the mineral rights under a property that is encumbered by a home mortgage may put the borrower in default. They may not find that out (nor will the lender) until they go to sell or refinance the property. There are several reasons why – a residential loan may prohibit the borrower from using the property for a commercial enterprise, including an industrial enterprise such as fracking. The mineral lease will have surface access provisions – easements – which may not be permitted encumbrances under the home loan. Or the lease itself may be in violation of the lender’s guidelines – if they have redlined fracking. Either way, the home owner is fracked. Welcome to Fracking Hell, pilgrim.