Churches fall to foreclosure

Houses of God land in bankruptcy amid mortgage crisis

By Suzanne Sataline

EASTON, Md. — The auctioneer told the small crowd huddled outside the Talbot County Courthouse that the property would be sold as is — rectory, bell tower, oak pews and rose-tinted stained-glass windows included.

"Who gives $700,000, 700, 700?" he called out. One man, a representative for a local bank, raised his finger. The auctioneer tried in vain to nudge the price up. "Sold!" he cried. St. Andrew Anglican Church had just been bought by the bank that had started foreclosure proceedings against it. 

"It's probably good for my soul to be taken down a notch," the Right Rev. Joel Marcus Johnson, the rector of St. Andrew, said after the auction.

During this holiday season of hard times, not even houses of God have been spared. Some lenders believe more churches than ever have fallen behind on loans or defaulted this year. Some churches, and at least one company that specialized in church lending, have filed for bankruptcy. Church giving is down as much as 15 percent in some places, pastors and lenders report.

The financial problems are crimping a church building boom that began in the 1990s, when megachurches multiplied, turning many houses of worship into suburban social centers complete with bookstores, gyms and coffee bars. Lenders say mortgage applications are down, while some commercial lenders no longer see churches as a safe investment.

http://www.tennessean.com/article/20081229/BUSINESS01/812290326