New data shows a shocking trend: Banks are foreclosing on religious institutions at an alarming rate. Much like individuals who lose the capability to continue paying their mortgages, churches, too, are feeling the financial crunch. In fact, since 2010, more than two hundred houses of worship have experienced foreclosures.
Since 2010, 270 churches have been sold after defaulting on their loans, with 90 percent of those sales coming after a lender-triggered foreclosure, according to the real estate information company CoStar Group.
In 2011, 138 churches were sold by banks, an annual record, with no sign that these religious foreclosures are abating, according to CoStar. That compares to just 24 sales in 2008 and only a handful in the decade before.
The church foreclosures have hit all denominations across America, black and white, but with small to medium size houses of worship the worst. Most of these institutions have ended up being purchased by other churches.
Not surprisingly, the highest proportion of church closures occurred in California, Georgia, Florida and Michigan -- the states that were hardest hit by the home foreclosure crisis. Reuters continues, explaining the factors surrounding the record number of incidents:
During the property boom, many churches took out additional loans to refurbish or enlarge, often with major lenders or with the Evangelical Christian Credit Union, which was particularly aggressive in lending to religious institutions.
Then after the financial crash, many churchgoers lost their jobs, donations plunged, and often, so did the value of the church building.
"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," explains Scott Rolfs, the managing director of Religious and Education finance at Ziegler (an investment bank).
Continue reading about this troubling trend here.