Our Father Who Art… Foreclosed

 

By Richard Magrann-Wells, Senior Vice President and Willis’ Financial Services Practice Leader

Blog:  http://ow.ly/9HWKX

Residential homes weren’t the only houses impacted by the financial crisis. Houses of worship have suffered as well. Until 2008 it was rare to see a church foreclosure. In the last two years, 270 churches have been sold as a result of defaults. Most church loans aren’t standard mortgages; they are short-term, often 5 year, commercial loans that generally mature with the entire balance due at maturity. In the past, banks were generally willing to work with churches to refinance overdue loans. However, in the current environment, with regulators and nervous shareholders watching, banks are becoming much tougher with ecclesiastical borrowers. Once again, the banks are placed in the role of villain as they foreclose on churches around the country, including some well-known historical places of worship like Boston’s Charles Street African Methodist Episcopal Church built in 1818. The numbers are relatively small when compared to the general housing market, but angry congregations may bring litigation and attract substantial press attention. Keep the churches, and even the bankers, in your prayers. Banks foreclosing on churches in record numbers

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