Add houses of worship to the list of casualties of the mortgage crisis.
Foreclosures and delinquencies for congregations are rising, according to companies that specialize in church mortgages. With credit scarce, church construction sites have gone quiet, holding shells of sanctuaries that were meant to be completed months ago.
Congregants have less money to give, and pastors who stretched to buy property in the boom are struggling to hold onto their churches.
“The economy has dramatically changed over the last year to 18 months in a way that very few, if any, had expected,” said John Stoffel, administrative pastor at Seabreeze Church in Huntington, Calif.
It’s hard to quantify just how many churches are at risk. Foreclosure records are scattered throughout county offices nationwide. Completing a foreclosure takes months or longer, so it’s too soon for many failures to show up on a company’s books. In financially stressed churches, clergy are often reluctant to discuss their plight. They don’t want to alarm their congregants, and they fear that any complaints about their dealings with banks will backfire.
“Right now, when you’re at the mercy of the lenders, you don’t want to look like you’re coming out against them,” said Bishop Eugene Reeves of New Life Anointed Ministries International in Woodbridge, Va.
Across the country, congregations large and small are struggling to pay off debt:
Reliance Trust, an Atlanta company that is trustee for nearly three-quarters of the church bonds in the U.S., has seen “some increases in delinquencies,” said spokesman Tony Greene, though he would not elaborate.
Among its clients is Temple Beth Haverim in Agoura Hills, Calif., which sought Chapter 11 bankruptcy protection last July and owes the company more than $7 million, Reliance said in court documents. The property is estimated to be worth less than what the synagogue owes.
The Evangelical Christian Credit Union, a major church lender with more than $700 million in loans last year, moved to foreclose on seven of its 1,100 loans in 2008, said Mark Johnson, the company’s executive vice president. The company has had “a noticeable increase” in late payments, and two more foreclosures are expected this year, he said. By contrast, the Brea, Calif., company said it had no other foreclosures until 2007, when there were two.
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