Has anyone else been given the packet of information to fill out for Countrywide Home Loans for permission to sign the subordination agreement? It is alot more complex than what JPD sent out. Countrywide charges $150 up front with no guarantee that they will approve the lease and the $150 is nonrefundable. In addition, they specify that they have the right to keep any bonus and proceeds to apply to the loan. If anyone in the Southern Hills group or Greenwood group can shed light on how they handled the packet of information, it would be much appreciated.
With the foreclosure rates rising nationwide, you will see banks raising fees to earn more cash, and requireing revenue made from the property from leasing and royalties to be applied to the loan. It probally doesn't help that countrywide went belly up and is now controlled by a califonia bank (Bank of America)
Those are good questions!
If you lease land to farming or sell off the trees, the land will still be there but if you lease your minerals, aren't you acutally selling them? I mean they will be carted off so part of that land will be gone forever. The ownership of the minerals will have transferred to someone else.
So I'll bet the mortgage companies may be figuring unless the mortgage specifically specifies what's mortgaged, nothing is excluded.
With trees and crops, the land is just being used, not sold. Aren't minerals considered physically part of the land?
You have many good points. I feel like most modern loan documents are impossible to understand by the average joe. (part of the problem with todays mess, but thats another debate for another day)
I believe is not the minerals themselves burdened by the mortgage, but the mineral rights. And you are most certainly correct in saying that they were probally never were considered in evaulating the loan. especialy in todays world of big banks in New York controlling the market.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More