Jewish Journal

When the bank forecloses your church

by Brad A. Greenberg

March 25, 2009 | 8:29 pm

God dwells among us but hasn’t had an earthly home since the destruction of the Second Temple in 70 A.D. Christians, for their part, learn from a young age that church is not a building but wherever two or more Christians gather. A house of worship, in fact, doesn’t need to be a house at all. But what happens when a church has a physical location, and that location goes into foreclosure?

Some Christians are finding out, as Daniel Burke explains in an article titled “Is God a Deadbeat Debtor?” Despite overplayed headlines from The New York Times, Wall Street Journal and Associated Press, church foreclosures are not spreading like gospel. Which is good because such news would be the opposite of gospel.

Burke writes for RNS:

“There is definitely a trend,” said Dan Mikes, a banker who has specialized in church loans for 18 years at Bank of the West in Walnut Creek, Calif. “Historically, there were no (church) foreclosures.”

Bankers considered churches a pretty safe bet, said Mikes. Passing the plate provides a steady source of income, church budgets are flexible and religious folks pay banks back.

“I compare it to a racehorse and a plough horse,” said Kelly Archer, president of the Church Loans & Investment Trust in Amarillo, Texas. “Church loans have always been the plough horse. They never got the headlines, never were the big kid on the block.”

That all changed in the late 1990s, bankers say, around the same time subprime mortgages and McMansions became hot. Churches competed to keep up with Pastor Jones across the street. They have a café, we want a café. They have a 1,000-seat auditorium, we want a 2,000-seat auditorium.

New banks heard churches were a safe market to dabble in. They over-estimated churches’ growth projections and threw money at them, said Mikes.

A number of churches and banks have blamed declining donations for the foreclosures. But Mikes says churches have weathered similar downturns in the past without going belly up.

And not everyone agrees that donations are down. Just 28 percent of evangelical pastors reported that charitable contributions were significantly lower (10 percent) than their goals in the fourth quarter of 2008, according to study by the Evangelical Council for Financial Accountability.

Historically, economic recessions don’t necessarily mean declining donations, Empty Tomb, an Illinois-based ministry that studies church finances, told the (Ala.) Birmingham News. From 1968 to 2005, church giving declined in only three of the 10 years that witnessed a month or more of economic distress, Empty Tomb said.

Often, it’s personality conflicts, pastor scandals or other headaches that lead to church bankruptcies, scholars say.

While mainline Protestant churches have been losing members for years, they don’t have these bankruptcy problems. There are two reasons for that, said Valerie Munson, an expert on church property law at the University of St. Thomas School of Law in Minneapolis.

Theologically, when mainline Protestants (your Lutherans, Presbyterians, Methodists and other WASPy types) open a chapel or sanctuary, they symbolically give it to God.

“To them, the space itself is dedicated to God and holy,” Munson said. “To place a mortgage on the property—to give a secular bank a business interest in the property—is contrary to that holy purpose to them. It is giving to someone else part of what you have given to God. “

In contrast, evangelicals don’t think about their relationship to God in terms of space itself being dedicated to the Almighty, Munson said. “They are more likely to think in terms of their worship and their mission—if mortgaging a building will serve their mission (how they are using their lives for God) then they are living faithfully.”

Read the rest of Burke’s story, with lots of links, here.

(Hat tip: Blogging Religiously)

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