WATCH: Trulia stages haunted house for unsuspecting homebuyers

Are record-low interest rates masking high-cost mortgage lending?

Five leading economists weigh in and the answer may surprise you

Auction.com partners with Google to predict housing trends

Nowcast will predict in real time
W S
Servicing / The Ticker

Oil, gas companies eager to pay lenders, servicers

/ Print / Reprints /
| Share More
/ Text Size+

Mortgage lenders, servicers and investors can still gain a profit on foreclosed properties by subordinating the distressed property's mortgage for eager oil and gas companies, according to a report from Wingspan Portfolio Advisors.

"Lenders and servicers are definitely missing a revenue opportunity," said Steven Horne, CEO and president of Wingspan Portfolio Advisors.

The oil companies have leases under entire communities that permit horizontal drilling processes to recover natural gas and oil deposits, but if the lease is lost due to foreclosure and a subordination agreement is not worked out, significant production lasting from 20-30 years can be lost, Wingspan reported.

Horne explains, "Subordinating a mortgage for an oil and gas lease is not like allowing a typical lien that poses a foreclosure risk. The mortgagee can still foreclose, but it will not wipe out the lease."

Oil and gas companies will pay a subordination fee that can run as high as $500 depending on the location and productivity of the lease, Horne added.

"We’re in an environment where there is much riding on the success of the oil and gas industry at making us less dependent on foreign energy and on the long-term health of the housing finance system," Horne concluded.

 

 

 

 

Recent Articles by HousingWire Staff

Comments powered by Disqus