These Days, Even God Can't Get a Loan: Church Foreclosures Skyrocket

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Foreclosures on churchesThe Bible tells us that "it is easier for a camel to go through the eye of a needle, than for a rich man to enter the kingdom of God." Foreclosing on his pastor probably doesn't make the trick any easier.

There's a new development in the housing crisis: Foreclosures are hitting houses of worship.

According to a report from Reuters, 2011 was a record year for foreclosures on church buildings. Prior to the Great Recession, bank seizures of houses of worship were rarer than atheists in foxholes, with only a handful of foreclosures occurring in the decade prior to 2008.

That all changed when the mortgage crisis hit.

Just as homeowners in the 1990s and early 2000s rushed to take advantage of rising house values and fatter wallets to spend lavishly on real estate, the real estate bubble encouraged irrational exuberance in the pews. Congregations took out loans to refurbish and enlarge their church buildings. Unfortunately, these loans were not the 30-year fixed mortgages that most of us are familiar with. Instead, churches took out commercial loans -- five-year loans with balloon payments at the end.

The usual procedure was to refinance loans when their balloon payments came due. Problem is, loans predicated on the inflated real estate assessments that prevailed before 2007, once reassessed for possible refis in 2010 and 2011, were found to lack sufficient principal. Banks began turning down refinancing applications, and churches were told to either pay off their loans (i.e., make the balloon payment) or go into foreclosure.

Result: From 2010 to present, bank foreclosures on church buildings have skyrocketed -- 270 foreclosures since 2010; a record 138 foreclosure sales in 2011 alone.

Forgive Them, Father

Loan officers asked about this trend are, not surprisingly, chagrined. As one banker named in the Reuters piece complained: "It is not the practice of the Bank to [use] foreclosure in the absence of good cause. We trust the community will not rush to judgment without full knowledge of all the facts."

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Better pray for a miracle, then. It might make all the economic sense in the world to foreclose on a debtor that's unable to pay its bills. If a debtor can't pay, the logical thing to do is foreclose, resell the property, and try to get back at least part of the money lent. But when a bank does this to a church, it's playing with fire (and brimstone).

Whatever fate may await foreclosing bankers in the afterlife, the perils in the here and now are clear. Foreclose on a family home, and you've made a handful of people angry. Foreclose on a church, though, and you've taken your PR nightmare wholesale. In one step, you've won your bank the ill will of hundreds of congregants -- or more. People who will, in all likelihood, spend the rest of their mortal lives regaling friends, neighbors, and other potential banking clients with the story of how they "will never bank with XYZ Bank again -- those guys foreclosed on my church!"

And it gets worse. Say a bank feels it has no choice but to foreclose on a church. What's it supposed to do with the property? Houses are no picnic to sell these days: Who's going to buy a house of worship out of foreclosure?



A Silver Lining

Depending on square footage and nearby foot-traffic patterns, a slightly used church might make an appealing location for, say, a new Starbucks. McMansion shoppers might be another target demographic for the used church market, if the churches aren't too small.

But as it turns out, Reuters reports that there is one bit of good news for the banks. Financial institutions foreclosing on delinquent church buildings have so far been able to resell most of their inventory to other congregations.

Just as in the housing market, where foreclosures and falling prices created opportunities for new buyers to purchase starter homes, congregations that used to squeeze into a rented school gymnasiums or other temporary quarters are finding opportunities to buy starter churches on the cheap.

As William Cowper once observed: "God moves in a mysterious way, his wonders to perform."

Motley Fool contributor Rich Smith does not own shares of any companies named above. The Motley Fool owns shares of Starbucks. Motley Fool newsletter services have recommended buying shares of and writing covered calls on Starbucks.

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Zion

God’s judgment is on the Banker’s greed, haters against the True God, and wage exploiters in the form of nature because they would not relent from making God’s Children homeless and ignoring their rights and legal requests. Bank of America has been in default of our Countrywide predatory loan and have set a projected foreclosure sale date. Bank of America is not honoring our Qualified Written Request for copies of our lock-in agreement that shows a different loan, and our request for all documents and communication of 6 modification attempts, in which 5 were ignored and told once we don’t qualify. There was even an attempt through attorneys that promised return of our money if they couldn’t modify our loan, but they kept our money because we wouldn’t follow their advice to lie to the bank about our income.
We have given this information on how we have been treated and terrorized acts against us for facing homelessness in a society of no jobs and increased gas prices against us as well, to; News companies, DOD, DOJ, Attorney’s, Governors, The White House, Obama, Bank of America Executives, Investors of Banks, etc. and have had no reply nor anyone to care about my AMERICAN RIGHTS against a predatory loan. No one seems to care and My Country has failed me. When this happens to True Children of God, then things like “Storm Sandy” occur to end the greed and exploitation of wages, against them. Wake up America, the next storm is coming because all you banks and governments care about is your money and dictatorship to support your own greedy, selfish tomorrow, which brings your next storm!
https://www.facebook.com/notes/zion-omega/god-omnipotent-reigns-glory-hallelujah/541814702500500#!/notes/zion-omega/banks-governments-religions-and-predatory-lending-vrs-god/537287276286576

November 02 2012 at 6:48 PM Report abuse rate up rate down Reply
Zion

18 Then you shall again discern Between the righteous and the wicked, Between one who serves God And one who does not serve Him.

Malachi 4
The Great Day of God
4 “For behold, the day is coming, Burning like an oven, And all the proud, yes, all who do wickedly will be stubble. And the day which is coming shall burn them up,” Says the Lord of hosts, “That will leave them neither root nor branch.
2 But to you who fear My name The Sun of Righteousness shall arise With healing in His wings; And you shall go out And grow fat like stall-fed calves.
3 You shall trample the wicked, For they shall be ashes under the soles of your feet On the day that I do this,” Says the Lord of hosts.
4 “Remember the Law of Moses, My servant, Which I commanded him in Horeb for all Israel, With the statutes and judgments.
5 Behold, I will send you Elijah the prophet Before the coming of the great and dreadful day of the Lord.
6 And he will turn The hearts of the fathers to the children, And the hearts of the children to their fathers, Lest I come and strike the earth with a curse.”

Psalm 21:9
You shall make them as a fiery oven in the time of Your anger; The LORD shall swallow them up in His wrath, And the fire shall devour them.
Psalm 89:46
How long, LORD? Will You hide Yourself forever? Will Your wrath burn like fire?

Isaiah 9:19
Through the wrath of the LORD of hosts The land is burned up, And the people shall be as fuel for the fire; No man shall spare his brother.
Ezekiel 21:31
I will pour out My indignation on you; I will blow against you with the fire of My wrath, And deliver you into the hands of brutal men who are skillful to destroy.
Ezekiel 22:21
Yes, I will gather you and blow on you with the fire of My wrath, and you shall be melted in its midst.
Ezekiel 22:31
Therefore I have poured out My indignation on them; I have consumed them with the fire of My wrath; and I have recompensed their deeds on their own heads,” says the Lord GOD.
Ezekiel 38:19
For in My jealousy and in the fire of My wrath I have spoken: ‘Surely in that day there shall be a great earthquake in the land of Israel,

September 10 2012 at 3:22 PM Report abuse rate up rate down Reply
Zion

Solar Flares, CME’s and sunlight, sun’s energy, radiation and substance added to Water, air, and food with God, His word, His Son, His Son's Blood and Holy spirit, truth, purity and righteousness, is coming for Bank of America and all that exists in the universe, Earth , All heavens and beyond, Past present and future, Eternally and NO-ONE can remove Him from there in the name of Jesus Christ, Amen!
Matthew 3:11
I indeed baptize you with water unto repentance, but He who is coming after me is mightier than I, whose sandals I am not worthy to carry. He will baptize you with the Holy Spirit and fire.
The Reign and Indignation of God
Isaiah 66:14 When you see this, your heart shall rejoice, And your bones shall flourish like grass; The hand of the Lord shall be known to His servants, And His indignation to His enemies.
15 For behold, the Lord will come with fire And with His chariots, like a whirlwind, To render His anger with fury, And His rebuke with flames of fire.
16 For by fire and by His sword The Lord will judge all flesh; And the slain of the Lord shall be many.
17 “Those who sanctify themselves and purify themselves, To go to the gardens
After an idol in the midst, Eating swine’s flesh and the abomination and the mouse,
Shall be consumed together,” says the Lord.

September 10 2012 at 3:22 PM Report abuse rate up rate down Reply
Wayne Bradshaw

Beijing policy makers say they're eager to encourage greater domestic consumption. Chinese shoppers are famously luxury-happy, flying to Hong Kong and further afield in droves to stock up on Louis Vuitton, Gucci, Chanel and more. All of which means the stage is set for the next great innovation to hit China: Louis Vuitton Outlet malls.

May 06 2012 at 12:01 AM Report abuse rate up rate down Reply
Gg

plop the stopn.

March 17 2012 at 7:09 PM Report abuse +3 rate up rate down Reply
Gg

plop

March 17 2012 at 7:08 PM Report abuse +4 rate up rate down Reply
accuscope

Lol... They don't even read their own Bibles!... Its says "be no mans debtor" except for the debt to love others as ourselves.

So many have turned church and the bible into a business... The Bible teach's many things but its odd how so many are always hammering home the importance of the tithe and the blessings you will obtain by giving your money... I'm not saying there is no truth in that, but they are perverting it for their own purposes.

God says " I have given you all things freely"... Don't forget that is said under the new covenant (new testament) and the tithe is under the old covenant (old testament)... The new covenant brings life, The old covenant brings death... Don't believe it?... Read the bible for yourself.

March 17 2012 at 8:41 AM Report abuse +5 rate up rate down Reply
accuscope

Lol... They don't even read their own Bibles!... Its says "be no mans debtor" except for the debt to love others as ourselves.

So many have turned church and the bible into a business... The Bible teach's many things but its odd how so many are always hammering home the importance of the tithe and the blessings you will obtain by giving your money... I'm not saying there is no truth in that, but they are perverting it for their own purposes.

God says " I have given you all things freely"... Don't forget that is said under the new covenant (new testament) and the tithe is under the old covenant (old testament)... The new covenant brings life, The old covenant brings death... Don't believe it?... Read the bible for yourself.

March 17 2012 at 8:39 AM Report abuse +1 rate up rate down Reply
accuscope

Lol... They don't even read their own Bibles!... Its says "be no mans debtor" except for the debt to love others as ourselves.

So many have turned church and the bible into a business... The Bible teach's many things but its odd how so many are always hammering home the importance of the tithe and the blessings you will obtain by giving your money... I'm not saying there is no truth in that, but they are perverting it for their own purposes.

God says " I have given you all things freely"... Don't forget that is said under the new covenant (new testament) and the tithe is under the old covenant (old testament)... The new covenant brings life, The old covenant brings death... Don't believe it?... Read the bible for yourself.

March 17 2012 at 8:38 AM Report abuse +1 rate up rate down Reply
Mike

What is his credit score?

March 17 2012 at 2:09 AM Report abuse +1 rate up rate down Reply