Much of the recent news about Florida foreclosures has centered on homeowners facing foreclosure. But little has been said about the impact of the foreclosure crisis on businesses and religious institutions. Recently, the Wall Street Journal reported on the worrying increase in foreclosures on buildings owned by churches.
Florida and other states have seen a significant rise in the foreclosure rate for all properties, including churches and other buildings used for religious purposes. Between 2006 and 2008, fewer than ten religious groups lost property because of foreclosure. Between 2008 and 2010, nearly 200 faced that fate.
Many churches, like individual homeowners, became caught up in the real estate boom. They expanded too quickly and purchased property with high mortgage payments. That worked well for a short period of time. But now the economic recession has caused church attendance to decline. Those who still attend church are tithing less, which leaves the churches with less operating income.
Without the consistent source of weekly income, churches that once had plenty of money to keep up with the property payments are finding themselves behind on payments. As property values decline, those same churches are also underwater, owing more than the properties are worth.
As one pastor said, “I just told the bank to take [the property].” That pastor had tried to negotiate with his lender. He had tried to refinance, but because he owed more than the property was worth, refinancing was not an option. At the end, he felt that “there’s not really another choice but to walk away.”
This is the same situation that many individual homeowners have found themselves struggling with recently. Anyone who is facing foreclosure should know that they do have options. An experienced bankruptcy attorney can help you explore your options and make decisions that are in your best interests.
Source: Wall Street Journal, “Churches Find End Is Nigh,” Shelly Banjo, 25 Jan 2011