American Churches in ForeclosurePosted in Foreclosures, by Courtney Allen
Some recent news in America deals with a good number of church foreclosures. The records reveal that taking advantage of religious matters, church authorities have been lagging behind on their regular mortgage payments for a long period. Banks and lenders were waiting for their payments for a long time considering their religious entities. However, after a long wait, these lenders have started foreclosing many of these churches in the country.
In accordance to the information provided by a real estate agency, CoStar Group, there have been 270 foreclosed churches in the country since 2010 and nearly 90% of these foreclosed religious places have been put up for auction.
The agency also stated that last year, there were 138 foreclosed churches which were sold in auctions. In 2008, there were only 24 sales of foreclosed churches, and a decade ago there were just one or two such cases. The maximum number of these foreclosed churches was bought by other churches. A large number of sales of foreclosed churches were found in the hardest hit areas of foreclosure like Michigan, Georgia, California and Florida.
The MD of the Religious and Education finance department of Ziegler bank, Scott Rolfs said, “Churches are among the final institutions to get foreclosed upon because banks have not wanted to look like they are being heavy-handed with the churches.”
The rules and regulations for a loan and its default for a church are quite different from other housing loans. These commercial loans get matured after five years with the total balance as a pending non paid amount.
Generally, in such cases, the lending parties refinance such due loans. But in case of churches, the banks were reluctant to take any steps as the regulators restricted them from take any measures and pressurized the bank authorities to clear their balance sheets.
Rolfs said, “A lot of these loans were given when the properties were evaluated at a certain level in 2005 or 2006. Banks have had to reappraise the value of these properties, whether it’s a church or a commercial office building. Values have gone down, so the loans cannot continue in the same form.”
Some of the factors which are responsible for church foreclosures are almost similar to the factors responsible for residential foreclosures followed by an eviction process.
During the housing boom some years ago, church authorities took huge loans for renovation or to expand their churches, but as the economic crisis started to rule society, many people became unemployed or underemployed and stopped making donations to churches. As a result to all these factors, their loans remained unpaid and these churches moved into foreclosure.