Debt and the American church

The headline on a recent Reuters story caught my attention:

Banks foreclosing on churches in record numbers

The lede —  in classic inverted-pyramid fashion — got straight to the point:

LOS ANGELES (Reuters) - Banks are foreclosing on America’s churches in record numbers as lenders increasingly lose patience with religious facilities that have defaulted on their mortgages, according to new data.

The surge in church foreclosures represents a new wave of distressed property seizures triggered by the 2008 financial crash, analysts say, with many banks no longer willing to grant struggling religious organizations forbearance.

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.

After reading the entire story — roughly 1,000 words — I have two main reactions. The first is a general journalistic reaction. The second relates more specifically to the actual religion content (that’s our purpose at GetReligion, after all).

Reaction No. 1: The piece lacks perspective.

By that, I mean that Reuters fails to put the numbers reported up high into context. Yes, I understand that a record 138 churches were sold by banks in 2011. But how many churches paid their mortgages on time and were not sold? Is 138 really a lot? The story fails to provide enough background for readers to answer that question.

Instead, the report makes broad statements such as claiming that the crisis has hit “all denominations, black and white, but with small to medium size houses of worship the worst.” The racial note is a bit strange given that many denominations are quite diverse. The reference to small to medium size houses of worship seems to require additional clarification. How big, for example, is a “medium size” house of worship?

There is this brief note at the end:

There are more than 300,000 churches in the United States.

“The church foreclosure market isn’t anything extraordinary,” said Rolfs. “It’s simply another byproduct of the credit bubble.”

– Reaction No. 2: The piece lacks theological content.

The story approaches the issue from a purely financial standpoint. Reuters makes no attempt to delve into any intriguing religious questions, such as what it means that churches — who presumably hold theological beliefs on debt and finances — are defaulting on loans.

What would Jesus do when faced with a church foreclosure? Or would he have gone into debt in the first place? Maybe it’s just me, but I’d love to see such questions explored.

Surely some (or most?) of these churches have faced not just foreclosures but crises of faith, right?

Vague reference is made to an evangelical credit union:

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.

I’d love to know more about exactly what the Evangelical Christian Credit Union is.

All in all, I can’t help but think there’s an important story behind these church foreclosure numbers. I just don’t think this Reuters report is the one.

Now, it’s your turn, gentle GetReligion readers: Read the story and weigh in. Am I being too critical? What questions would you ask? What would make the piece better? Did Reuters nail the story or not?

What say ye?

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About Bobby Ross Jr.

Bobby Ross Jr. is an award-winning reporter and editor with a quarter-century of professional experience. A former religion editor for The Oklahoman and religion writer for The Associated Press, Ross serves as chief correspondent for the The Christian Chronicle. He has reported from 47 states and 11 countries and was honored as the Religion Newswriters Association's 2013 Magazine Reporter of the Year.

  • Chris Gagner

    I work for an accounting department at a bank, and I’ve seen several churches in our community be forclosed. It’s really sad to think about… but maybe it’s a warning to churches to focus less on how big their building is… and more on reaching out to people for Christ. You can meet anywhere… it doesn’t have to be a fancy building.

  • Bobby Ross Jr.

    Hi Chris,

    Are you new to GetReligion? You’ve left comments on a couple of recent posts that give an opinion on the issue, not on the media coverage.

    GetReligion is a journalistic site focused on the secular media’s coverage of religion news. In general, we require that comments focus on journalism and the media.

    The question in this case is not whether churches should build big buildings, but whether the media adequately covered the issue of church foreclosures.

  • Reader John

    The coverage does seem inadequate.
    I view it from the perspective of a Building Committee chairman whose parish is considering whether it has the wherewithal to proceed. This story would tend to alarm people unduly. 0.09% foreclosure rate is not all that remarkable when some cities reportedly have 50% of homes “upside down” on their mortgages, but it would tend to dissuade people from undertaking anything on less than 100% assurance of financial ability if they don’t notice the holes.

  • Brendan

    Honestly, I think you are being too critical. I don’t think the news piece leaves out any necessary information. Sure the extra info you requested would have been nice, but I think that would have made the article too long. From an editing standpoint I think the amount of info in the article was just right.

  • sari

    Agreed on rxn#1: More information was necessary, both hard data and more meaningful descriptions. I suspect that the b&w designation derived from the profiles that followed.

    Less agreed on rxn#2: Regardless of any given church’s theology, a loan is a loan, and loans need to be repaid in a timely manner. The interviews gave a sense that banks have been more lenient with churches than with their other commercial customers and that churches have operated on the assumption that they could float their loans indefinitely. The situation changed with the economic downturn, when both income and property values plummeted. Perhaps it would have been interesting to contrast churches that took loans with those that did not, but, in the end, theology seems tangential to the discussion.

    As an aside, pre-downturn, the then president of my very small synagogue was gung ho to buy a building rather than rent at the local J. In retrospect, his failure to drum up sufficient donors has turned out to be a blessing. We would have bought at the height of the market -and- been unable to meet payments after several big donors were affected both by the market downturn and Madoff. Perhaps the journalist could have asked why congregations require huge/fancier than necessary buildings in the first place.

  • Suzanne

    tended to agree with most of your assessment, but not so much re: how many churches not foreclosed upon. Isn’t that kind of like “how many planes didn’t crash today”?

    More interested in perspective of foreclosures now vs. those before the recession. Or percentage of total foreclosures that are churches.

    And agree the lack of theological perspective is important.

  • GhaleonQ

    I also don’t feel like I read about church growth in the fat years, so I’m not sure if my perception of the situation is affected by the decline stories.

    Contrast that with parcohial schools, which ARE declining in real ways. We know that not simply from data, but from reporting now AND reporting during growth periods where dollars went to charter schools and not private religious schools. We only have 1 side of the story here.

  • Bobby Ross Jr.

    tended to agree with most of your assessment, but not so much re: how many churches not foreclosed upon. Isn’t that kind of like “how many planes didn’t crash today”?

    Yeah, maybe so. Although don’t you have to know how many planes didn’t crash before you can evaluate how safe it is to fly? I mean, 153 deaths in commercial flights is bad, but doesn’t it add some perspective to know that the odds of dying in a crash were 1 in 50 million?

  • Jettboy

    “The church foreclosures have hit all denominations across America”

    I highly doubt “all denominations” across America. The Church of Jesus Christ of Latter-day Saints (Mormons) pays for all their property and buildings up front and in full. Debt of any kind beyond necessities of house and transportation is preached against. I am sure others, maybe the Catholic Church, are the same.

  • Joel

    I can’t speak for all Catholic parishes, but I understand our diocese has a sort of an in-house bank that supplies the mortgage loan to the parish. The repaid money goes to the next parish that needs a new building. Secular banks are kept out of the equation.

    As for this:

    The racial note is a bit strange given that many denominations are quite diverse.

    The only reason I can see for this is the unconscious (I hope) assumption that black churches are likely to be more financially strapped than white ones.

  • Wertiyal O.

    The church financial obligation to pay its indebtedness to bank has resulted to foreclosures. It is sad to hear that because the church is in that financial crisis. The same article in:Mortgage crisis in the house of the Lord . Church property foreclosures are at an all-time-high, according to a recent report. It seems that not even the God is exempt from the mortgage dilemma.

  • Chris Gagner

    Oh.. I didn’t realize that. Sorry about commenting on the wrong thing. I don’t really care too much about the “journalism” of the posts. Good luck with your site!! :)

  • Douglas Funk

    Yeah….they borrowed the money…they make the payments or they lose the collateral….that simple. What ever happened to independence? I think the Bible says somewhere….the borrower is servant to the lender. That’s all there is to say about it. But in some of the stories I’ve read online they can’t believe the rules actually apply to them….just can’t believe it. This is what we get after years and years of government subsidies (tax deductions) for church “donations.” No wonder they need to borrow money….who would ever go there if it was a paid-for older building and still no power. If the power of God is there the people will come….in droves. We need it so bad.

    That’s my comment.