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Foreclosure Crisis Hitting Houses of Worship

March 29, 2012, 3:04 pm | Posted by Dan Nejfelt

Foreclosure SignThe San Francisco Chronicle reported in a front-page story last weekend that hundreds of U.S. churches have gone into foreclosure in recent years. Several real estate research services quoted in the story each offered different estimates of how widespread church foreclosure has been, but the lower estimate said 270 have been sold by banks since 2010. Here’s more:

“Churches are full of members who lost jobs, who face home foreclosures themselves,” Jackson said. “Church is their place of refuge. If the refuge closes, they have no place to go.”

Financial issues span denominations but often are most acute for small to mid-size evangelical churches that are relatively new and are located in areas hard hit by the economic downturn.

They are not unlike struggling homeowners: When the economy was booming, some churches took on extra debt to expand, rehabilitate or move to larger spaces. Risky lending fueled the situation.

Once the recession hit, many cash-strapped parishioners moved or reduced their contributions, so church incomes were cut. At the same time, the real estate downturn meant religious properties were worth less, making them harder to refinance.

The story describes several congregations’ heartbreaking journeys from expansion to insolvency – some as a direct result of the economic collapse, others as a result of predatory lending practices by banks (which is hardly surprising, given the big banks’ record of preying on hard-hit families). These churches are losing not only the spaces where they worship, educate, baptize and eulogize, but also facilities where they provide crucial services to people at the margins, such as impoverished families, addicts, ex-offenders and the homeless.  Losing a church building is a crisis for church members and the broader community alike.

This kind of compound trauma demonstrates why we need a robust safety net for struggling families during hard times. The economic crises that wreak havoc on the most vulnerable can also weaken churches’ capacity to provide care and support for them.

H/T to Philanthropy Today.

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