Let us now pray: Church mortgage delinquencies on the rise

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Sounds like it might be time to pass the hat again. Many churches are having trouble paying their debts. Bloomberg recently profiled the Evangelical Christian Credit Union, which has written some $3 billion worth of church mortgages over the past ten years. Unfortunately, the combination of payments that rise when rates adjust and less money to make those payments is hitting churches hard, and many of them are defaulting. Roughly 145 churches have had to declare bankruptcy because they couldn't make their mortgage payments.

Evangelical Christian's percentage of delinquencies has doubled since 2007. The company steered its clients into commercial mortgages that were similar to the deals many Americans struck on their home loans, with lower initial payments that would balloon after a period of years. Many of these institutions refinanced in order to expand or renovate their facilities. At the time, this arrangement was a cheaper way for churches to access money than holding bond sales; in addition, churches were often approved to borrow more money than they could have raised via more traditional -- and perhaps less risky -- methods.

Unfortunately, when those monthly payments came due, churches -- like homeowners -- couldn't refinance because of the credit crunch and were stuck with the higher bills. Since many parishioners are in the same boat, houses of worship can't rely on increased donations to help make up for the shortfall.

Previously, churches had been considered a very safe bet for lenders, but now one analyst cited by Bloomberg said church foreclosures are at a 20-year high. For its part, Evangelical Christian says its finances are healthy in spite of the uptick in foreclosures.

Some might say that the real losers in all of this are the parishioners of all those financially-troubled churches.
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