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(LoanSafe.org) – Churches at one time were great credit risks. In the good ole days, the constant flow of happy and employed parishioners helped keep their weekly collections plates filled to the brim with new donations. Paying their debts never used to be an issue. But this economic crisis has been hitting their congregations hard and now many church goers no longer have the extra cash to donate. Let alone money to pay their own mortgages or simply for food.
As a result, thousands of U.S. Churches can no longer pay their mortgages as they sink deeper into foreclosure.
According to the U.S. Census, spending on construction of houses of worship had almost doubled form $3.8 billion in 1997 to $6.2 billion in 2007. Now, experts claim that they are seeing more stress in churches than they have in modern history. A review of foreclosure filings in the Thomson Reuters Westlaw legal database shows proceedings against American churches have almost tripled since December of 2007, when the crisis had first began.
Like struggling homeowners who are suffering , this may also be the great church depression.
It is a sad truth, but foreclosures do not not discriminate. It doesn’t matter if you’re an every day Joe, sinning drunkard or preaching pastor. Simply put, if you don’t pay that mortgage, you will lose your property. What is law is law and what is morally wrong has proven to be a mute point ever since mortgages were invented back in the medieval days. Yes, they are that old.
So are mortgages evil?
I wouldn’t say they are evil, but when you do violate them, the long arm of the law is certainly not on your side. The reason being is that mortgage contracts are backed by property laws and hardships are backed by well, sad stories and hard times. Lenders do not discriminate when debtors do not pay their loans as agreed and our nations churches are getting hit hard by the foreclosure crisis.
Unfortunately, when you break a mortgage contract, you lose your property. You can kick, scream and pray all you want, but the facts are that this is the reality that all real estate owners must face. They have been facing this same situation for thousands of years folks.
In Anglo-American law, the method by which a debtor (mortgagor) conveys an interest in property to a creditor (mortgagee) as security for the payment of a money debt. The modern mortgage has its roots in medieval Europe.
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The great jurist Sir Edward Coke, who lived from 1552 to 1634, has explained why the term mortgage comes from the Old French words mort, “dead,” and gage, “pledge.” It seemed to him that it had to do with the doubtfulness of whether or not the mortgagor will pay the debt. If the mortgagor does not, then the land pledged to the mortgagee as security for the debt “is taken from him for ever, and so dead to him upon condition, etc. And if he doth pay the money, then the pledge is dead as to the [mortgagee].”
When you default on a mortgage, your right to remain in possession of the property is lost. You are essentially dead to the lender who is holding your note. Unfortunately, for our country’s churches, they are not immune to contract law and being holy is certainly not a viable defense to a foreclosure action.
Praying may help, but it looks like millions of foreclosure prayers have been going unanswered over the last few years.
So what can churches do to stop these evil foreclosures? Here are some basic tips that may help some congregations avoid foreclosure so they can get back to what they do best.
- Loan Modification - Just like any other debtor, churches may be eligible to obtain a modification from their lenders.
- Bankruptcy – A chapter 11 may help get some congregations back on track.
- Community Donations – Get loud and creative to bring in donations to help you get back on track with your mortgage. Maybe you can enlist a local radio station or TV station to assist you in getting the word out to the community.
- Consolidate Churches - Maybe it is time to team up with a few other local churches and pool your resources into one new great church.
Pastors will need to be honest with their congregations and with themselves about this economic crisis. This is the time that we must all come together.
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